The U.S. Department of the Treasury struck yesterday at one of the most important lifelines of the Assad regime by imposing targeted financial sanctions on key figures responsible for the illicit import and export of oil products, long prohibited by U.S. and EU sanctions.
Treasury’s first target was Muhammad al-Qatirji and his firm, the Qatirji Company, which maintain “strong ties to the Syrian regime and facilitates fuel trade between the regime and ISIS.” A year ago, Reuters identified the Qatirji Company (or Katerji Group) as a key intermediary in the trade of grain between the Assad regime and the Islamic State. Syrian opposition media reported almost two years ago that Qatirji and his younger brother, Hussam, brokered the import of oil from the caliphate. Hussam is a member of the Syrian parliament and alleged militia boss who may merit designation along with his elder brother. Other individuals and companies within the Qatirji network may also now become financial targets for Treasury.
The extent of the oil trade between Assad and the Islamic State has likely diminished significantly now that U.S.-backed forces, led by the Syrian Kurdish YPG, have reclaimed almost all of Syria’s oil-producing territory. Oil production continues under Kurdish supervision, but it is unclear who is buying it. Opposition media reported earlier this year that the Qaterji network may be serving as an intermediary between Assad and the YPG. If the U.S. can verify these reports, it should exert pressure on the parties involved to stop aiding Damascus.
Treasury also imposed sanctions on what it described as a “large-scale fuel procurement network that operates entities in Syria, Lebanon, and the United Arab Emirates.” The targets included Lebanon-based firms Nasco Polymers and Abar Petroleum, Sonex Investments in the UAE, as well as Nasco chairman Fadi Nasser and Adnan al-Ali, an adviser to Abar.
This is not the first time the West has moved to disrupt Syrian fuel supplies. In 2015, Treasury sanctioned a network of eight companies and six vessels, as well as Syrian government entities responsible for receiving oil, including port management entities. A year earlier, the EU sanctioned one Lebanese and one Egyptian firm that a Reuters investigation identified as part of a Syrian effort to import 17 million barrels of oil. (The Lebanese firm successfully challenged its designation in an EU court.)
The repeated reconstitution of oil smuggling networks underscores both the importance of oil to the Assad regime and the need for constant and vigorous enforcement. Yesterday’s action represents a step in the right direction, but only addresses one component of the smuggling enterprise. Using commercial satellite imagery and publicly available data, Tanker Trackers identified half a dozen vessels that delivered oil shipments to Syria between April and June this year. Over a ten-month period, one of those ships, the Sea Shark, made five round trips from Iran to Syria, carrying 4.7 million barrels of crude.
Tehran is the main guarantor of Assad’s oil supply and spends billions of dollars each year to ensure the regime’s survival so that Iran can employ Syria as a forward base for aggression against Israel. By driving up the economic and political costs of backing Assad, sanctions support the key American objective of countering Iranian influence. Ramping up sanctions on Assad is thus not a secondary goal, but rather must be an integral part of America’s Mideast strategy.
David Adesnik is director of research at the Foundation for Defense of Democracies. Follow him on Twitter @adesnik.
Follow FDD on Twitter @FDD and follow FDD’s Center on Sanctions and Illicit Finance @FDD_CSIF. FDD is a Washington-based, nonpartisan research institute focusing on national security and foreign policy.