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U.S. Treasury Sanctions Syrian International Islamic Bank

The U.S. strengthened efforts to restrict the Syrian government’s access to international capital by adding another bank to the list of those facing sanctions.

The U.S. designated the Syria International Islamic Bank “for acting for or on behalf of” the Commercial Bank of Syria and providing services to the Syrian Lebanese Commercial bank, both of which are subject to U.S. and international sanctions.

The United Nations estimates that as many as 10,000 people have died during the Syrian violence, which began with peaceful protests and has led to a conflict involving heavy weaponry. The UN has sent a team of monitors who are seeking to calm the fighting so that talks can begin on implementing a peace plan proposed by envoy Kofi Annan.

The action will add to economic pressure on the government of Syrian President Bashar al-Assad “by closing off a key evasion route,” David Cohen, the Treasury’s undersecretary for terrorism and financial intelligence, said in a statement. The U.S. “will continue to close off the Assad regime’s access to the international financial system.”

Even though the regime has yet to comply with the six-point ceasefire plan brokered by Annan, the Obama administration does believe the sanctions are working, according to an administration official who wasn’t authorized to speak to the news media.

‘Silver Bullet’

U.S. officials are of the opinion that there isn’t one “silver bullet” sanction that will push the regime to comply with the Annan plan, the official said. Instead, they see the combination of multiple countries’ sanctions as increasing the pressure on the Assad regime, the official said.

A meeting of the Syria Sanctions Committee of the Friends of the Syrian People on June 6 will offer an opportunity to explore which sanctions have been most effective and what other measures can be taken, the official said.

While the government of Qatar is also taking “corresponding actions,” today’s designation will not target the Qatari investors who hold investments in Syria International Islamic Bank, the Treasury said.

“What Treasury is attempting to do is essentially financially strangle the regime,” said Mark Dubowitz, a sanctions specialist who has advised Congress and the Obama administration. After large banks are sanctioned, a government targeted by the U.S. will look for “workarounds,” or other “financial channels” through which it can move money.

‘Another Pops Up’

“Some people call this a game of whack-a-mole,” said Dubowitz, executive director of the Washington-based Foundation for Defense of Democracies. “You hit one and another pops up. I think that’s the wrong analogy. This is an example of trapping the regime in a spider’s web, where the regime struggles to get free the more it entraps itself.”

From 2011 to 2012, the Syria International Islamic Bank has “surreptitiously facilitated financing worth almost $150 million on behalf of the Commercial Bank of Syria,” the Treasury said.

To contact the reporter on this story: Meera Louis in Washington at mlouis1@bloomberg.net;

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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