Reports are coming out today that a year after the imposition of broad economic sanctions on Syria, consumer prices are surging as sanctions continue their grip on the economy. According to these reports, consumer prices rose 36 percent from a year earlier and climbed 2.9 percent from May. In addition, the Central Bureau of Statistics in Damascus is reporting that annual inflation in Syria increased almost 33 percent. Bloomberg is reporting that this is the highest figure this year.

Due to the sanctions, their disruption of trade routes, and the shortage of goods that have resulted, inflation has spiked and will continue to do so. There does not appear to be any let up in sanctions being imposed upon Syria, with the United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) announcing further sanctions last month targeting state-run oil company Sytrol and denying them access to the international banking system.

Despite the wide ranging and hard hitting sanctions imposed against Syria, OFAC has issued numerous general licenses under its Syria sanctions program. Indeed, OFAC has issued 15 general licenses which authorize transactions such as certain legal services to Syria, certain services incident to internet-based communications, and transactions related to telecommunications.

While generally there has been a trend away from country based sanctions programs in recent years, when they are issued OFAC does seem to be very liberal in their use of general licenses. This strategy affords the agency an opportunity to be flexible in their imposition of sanctions, but also the ability to shut down certain authorizations at the flip of a switch if they find that those authorizations are being abused to carry out activities in contravention of U.S. foreign policy and national security goals. This type of discretion and flexibility, however, usually only benefits the few parties that are willing to take the time to truly understand the sanctions programs. I find that most parties will shy away from engaging in transactions with an embargoed nation, regardless of the existence of any general licenses. To those parties, the risks and compliance costs often outweighs the reward.

The author of this blog is Erich Ferrari, an attorney specializing in OFAC matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.