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Weapons of Mass Destruction (WMD)

Analysts Say Syria Sanctions to Have Wide Impact

By Dale Gavlak June 22, 2020

Lebanon is facing challenges posed by the new U.S. Caesar Act, which authorizes new sanctions and financial restrictions targeting Syrian government, analysts say, because of close banking and commercial ties between the two countries. Analysts say Lebanon will be forced to revise its activities as its own floundering economy is in crisis due to what critics call years of mismanagement and corruption.

Analyst Maha Yahya, who directs the Carnegie Middle East Center in Beirut, says the Caesar Act has far-reaching implications for any entity or individual in Lebanon who has worked with Damascus because they risk sanctions.

"The Caesar Act is creating considerable pressure," she said. "The first list, they're mainly Syrians affiliated directly with the Syrian regime. But it will create a lot of challenges in Lebanon. It's a pressure point on Hezbollah, a tool that can be brandished at any point to address anyone seeking to normalize with a Syria under Bashar al-Assad. But, also for many companies that had started preparing for possibly getting involved in reconstruction in Syria."

While the Iranian-backed Shi'ite Hezbollah militia, also part of Lebanon's government and parliament, may be seen as the most obvious party affected by the Caesar Act, it certainly is not the only one.

Joseph Bahout, an academic fellow in the Middle East program at the Carnegie Endowment for International Peace, tells VOA that Hezbollah is already affected by other sanctions.

"On the military issue, Hezbollah is already under watch. It will continue to act. It will probably be more shrewd, more prudent. It will not change substantially this equation," he said.

Bahout says it is likely that Lebanon's internal security head will continue his visits to Damascus because they benefit Western powers as well. He sees the bigger impact on both countries' economies.

"The Caesar Act is not so much a military issue than a commercial and trade issue and this is where it will hit. It is hitting the Syrian economy at the core and now you have a very strong and rapid degradation of the situation in Syria. It will hit a huge amount of macro exchanges between Syria and Lebanon. It will probably hit Lebanon partially; for example. The deposits of Syrian figures in Lebanese banks will be much more closely monitored, a lot of transfers will be impossible to do," he said.

Bahout says five Lebanese banks with branches in Syria are stopping their business. Substantial trade of Lebanese products into Syria as well as Syrian agricultural goods into Lebanon will either be halted or "go underground" with smuggling, he adds.

Bahout says the present Lebanese government's attempt to normalize political ties with Damascus will likely come to an end.

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