Washington Hits Syrian Narco-Trade With New Sanctions

The United States imposed sanctions Tuesday on five Syrian targets for supporting the Assad regime in Syria by trafficking illegal drugs. The sanctions reflect the Biden administration’s continuing efforts over the past 12 months to respond more proactively to the Syrian narco-trade.

The production and trafficking of the amphetamine-like drug captagon “has become a major source of income for the Assad regime, the Syrian armed forces, and Syrian paramilitary forces,” the U.S. Treasury Department noted.

Tuesday’s designations include two Syrian nationals implicated in a major captagon bust off the coast of Crete in 2018. Treasury sanctioned Taher al-Kayali, a Syrian businessman involved in trafficking “drugs to Europe by way of Greece and Italy.” Al-Kayali used his company Neptunus LLC to purchase the cargo ship Noka that Greek authorities intercepted in 2018 with approximately $100 million worth of captagon on board. Neptunus is one of three companies that Treasury designated on Tuesday for facilitating trafficking operations.

Treasury also imposed sanctions on Mahmoud Abdulilah Al-Dj, a Syrian businessman tied to the Noka operation and involved in trafficking captagon to Libya. Al-Dj owns the other two entities that Treasury designated: Al-Ta’ir Company and FreeBird Travel and Tourism. According to Treasury, Al-Dj used Al-Ta’ir to “open a major smuggling line from Lattakia to Benghazi, which has resulted in huge profits for Captagon traffickers.”

Tuesday’s announcement likewise designates six targets for sanctions evasion and helping Damascus profit from the mining sector. The half-dozen designees include a Russian national and an Emirati-Swiss company.

Washington last imposed captagon-related sanctions in March 2023 in coordination with the United Kingdom. Those designations included members of the Assad family, their allies, and Lebanese affiliates. In June, the State Department released a congressionally mandated interagency strategy to “disrupt and dismantle” the Syrian narco-trade calling for the “use of economic sanctions and other financial tools to target Assad regime-affiliated trafficking networks” as a key line of effort.

To that end, Tuesday’s sanctions are a step in the right direction. But the Biden administration can do more to tighten the economic noose around Assad-affiliated trafficking networks.

In April 2023, the European Union imposed sanctions on over a dozen Syrian targets responsible for “the production and trafficking of narcotics, notably Captagon.” Even with Washington’s action on Tuesday, the EU designations remain more exhaustive. They also provide further indications that the Assad regime is intimately involved in the captagon trade. Treasury should consider expanding the existing sanctions that target regime-affiliated narcotics networks in line with the Europeans — and should do so with greater urgency. The administration should not rely on an annual sanctions package to designate Syrian traffickers.

Washington should also consider developing a methodology for identifying and targeting captagon precursor flows as well as money laundering networks affiliated with the Syrian narco-trade. Likewise, the administration can expand the use of trade transparency units, through which U.S. Immigration and Customs Enforcement works with partner governments to identify indicators of trade-based money laundering.

In shaping the economic pillar of its captagon strategy, the Biden administration must be clear-eyed about who profits from the regional drug trade. The EU noted last year that the captagon trade “has become a regime-led business model” that provides Assad and his inner circle with vital revenue. Iran-backed Hezbollah, Iranian militias in Syria and Iraq, and reportedly Iran’s Islamic Revolutionary Guard Corps are also involved. The Syrian narco-trade cannot be separated from Iran’s broader efforts to destabilize the region. Any U.S. strategy must take that into account.

Natalie Ecanow is a research analyst at the Foundation for Defense of Democracies (FDD), where she contributes to FDD’s Center on Economic and Financial Power (CEFP). For more analysis from Natalie and CEFP, please subscribe HERE. Follow Natalie on X @NatalieEcanow. Follow FDD on X @FDD and @FDD_CEFP. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.