The US' Caesar Act and Humanitarian Action in Syria7 September 2021
The US' Caesar Act is meant to deter support to reconstruction efforts by the Syrian government. The law can, however, also affect humanitarian action. This fact sheet explains how the Caesar Act works, and how it affects humanitarian actors.
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In December 2019, the bill known as the ‘Caesar Syria Civilian Protection Act’ was signed into law in the US. One of the Act’s principal objectives is deterring support to Government of Syria-led reconstruction efforts. It seeks to do this in a number of ways. One of these is by ‘listing’ or ‘designating’ non-US persons under US sanctions. This measure has alarmed humanitarian actors operating in Syria.
1. How does the Caesar Act work?
Primary sanctions are binding on the nationals of the state that imposes them or organisations registered there.
Secondary sanctions, such as those in the Caesar Act, try to induce compliance with US sanctions by persons and organisations that are not directly bound by them. They do so by the threat of designation if such persons carry out certain activities.
The Caesar Act aims to dissuade participation in Syrian Government-led reconstruction efforts by establishing the possibility of designating non-US individuals and entities that provide certain types of support to the Government of Syria.
It is simply an additional basis for designation under US Syria sanctions. Other bases for designation include ‘obstructing, disrupting, or preventing a ceasefire or a political solution to the Syrian conflict’.
2. What could lead to designation pursuant to the Caesar Act? And what are the consequences?
The Act lists five types of support that could lead to designation. Two could possibly be relevant to humanitarian actors:
Knowingly provid[ing] significant financial, material, or technological support to, or knowingly engag[ing] in a significant transaction with
(i) the Government of Syria (including any entity owned or controlled by the Government of Syria) or a senior political figure of the Government of Syria;
Knowingly, directly or indirectly, provid[ing] significant construction or engineering services to the Government of Syria.
The conduct that can give rise to designation under the Caesar Act is narrower in scope than the prohibitions in the primary Syria sanctions. For example, the Syria primary sanctions prohibit making any contribution or provision of funds, goods or services to the Government of Syria and related designated entities. Listing under the Caesar Act could only be imposed in relation to knowingly providing significant financial, material, or technological support, or knowingly engaging in a significant transaction with the Government of Syria.
The Act entitles the US President to determine that a particular person or entity has provided the support in question, and consequently to designate it. A person or entity designated pursuant to the Caesar Act is subjected to the following sanctions:
- a freeze on any of their assets in the US or in the possession or control of a US person; and
- a travel ban into the US.
3. Who has been designated?
On 17 June 2020, the US President issued a first round of designations targeting three individuals and six entities that engaged in war profiteering, or that provided significant construction or engineering services to the Syrian regime.
An additional four designations — one person, three companies — were made on 29 July 2020. These also targeted Syrian businesspeople and their companies. Two Syrian/Lebanese companies were added in November 2020. As of May 2021, the list of designations stands at eleven entities and four persons.
To date the focus of the designations has been Syrian persons or companies involved in or benefiting from luxury real property developments, and Syrian/Lebanese companies working in the petroleum sector.
4. How can the Caesar Act affect humanitarian actors?
Although the Caesar Act has generated considerable concern among humanitarian actors operating in Syria, the risk of them being designated under the Caesar Act is extremely low.
Arguably, a humanitarian organisation could fall within the bases for designation. This could be the case, for example, if it carried out significant engineering or re- construction work to rehabilitate essential infrastructure such as medical facilities or water purification and distribution systems, as this could be considered as ‘directly or indirectly’ providing services to the Syrian government.
However, the likelihood that the US President would exercise his discretion to designate a humanitarian organisation for these reasons is very low.
The other grounds for designation include operating in a military capacity, significantly facilitating Syria’s domestic production of natural gas and petroleum products, and providing aircraft and aircraft spare parts or goods and services associated with the operation of aircraft. Rehabilitation activities carried out for humanitarian purposes are of a significantly different nature to the focus of the Act. Moreover, transactions carried out by humanitarian organisations are unlikely to be considered ‘significant’.
What the Caesar Act does do is generate additional designated persons or entities that humanitarian actors, which must comply with US sanctions, must screen as part of their ordinary compliance procedures.
Lack of clarity on the Caesar Act has exacerbated the risk-adverseness of the banking sector, which has further curtailed the services it is willing to provide to humanitarian organisations operating in Syria.