March 30, 2017 | Policy Brief

EU Delists Syrian Tycoon, Highlighting Global Sanctions Pitfalls

March 30, 2017 | Policy Brief

EU Delists Syrian Tycoon, Highlighting Global Sanctions Pitfalls

The European Union’s second-highest court nullified sanctions last week on a businessman with Syrian and Russian citizenship for his role in aiding both the Islamic State (IS) and the Assad regime. The EU listed George Haswani in March 2015 – and the U.S. followed suit that November – for facilitating oil deals between the two sides, but the new ruling concluded that the EU had presented insufficient evidence to justify the sanctions. Haswani’s case underscores the difficulty of orchestrating a multilateral sanctions regime, but is also an opportunity for the U.S. to show stronger leadership in maintaining international sanctions.

Haswani, the co-owner of a Syrian engineering firm that operates a large natural gas plant in the country, is uniquely positioned as a dealmaker between competing interests in Syria. He purportedly has “direct access” to Syrian strongman Bashar al-Assad, and also to Russian officials close to President Vladimir Putin. In 2014, he helped negotiate the release of nuns kidnapped by al-Qaeda’s branch in Syria in exchange for regime-held prisoners.

More recently, Haswani brokered contracts to sell oil and gas from IS territory to Assad, helping enrich the terror group in the process. Workers at a plant operated by his company, HESCO, even claimed the firm was sending IS $50,000 a month in protection money. HESCO management denied the claims, but admitted that IS helped run the plant.

Although Haswani maintains his innocence, he has written a letter acknowledging operating under IS directives, sending natural gas to territory held by the organization, and supplying the group with generator fuel. Haswani’s arrangement with IS is akin to a “joint-venture,” with HESCO dividing energy outputs between IS and the regime.

U.S. sanctions are most effective when implemented in tandem with allies around the world, including the EU and, when possible, the UN. However, EU courts have routinely thrown out sanctions due to appeals on human rights grounds and stringent due process standards. For its part, the UN has never designated Haswani, and all told has designated fewer than half of the nearly 1,000 specially designated terrorists and specially designated global terrorists on the U.S. Treasury list.

The Haswani case therefore illustrates the vulnerabilities of this international system of sanctions: Despite his connections to both IS and the Assad regime, only the U.S. sanctions on him will remain should the EU court’s ruling stand. Washington must now offer leadership in bridging the gaps between differing international legal standards and procedures.

The Council of the EU, which handles the bloc’s sanctions decisions, may still appeal the new ruling. The U.S. should ensure the EU maintains Haswani’s designation, either through an appeal or by issuing an updated designation. Subsequently, Washington should provide Brussels with any further incriminating information it has on Haswani to help it withstand any future appeal.

Finally, the U.S. should make clear it will not tolerate individuals who transact with, or on behalf of, the Islamic State, nor those who aid and abet the Assad regime. Washington must continue to identify and designate such perpetrators, and share its findings with the EU and UN to develop a more robust, standardized international sanctions regime.

Yaya J. Fanusie is the director of analysis at the Foundation for Defense of Democracies’ Center on Sanctions and Illicit Finance, where Alex Entz is a research analyst. Follow him on Twitter @SignCurve.