Foreign Investment in Syria’s Reconstruction Carries Terror Finance Risk

Saudi Arabia and Qatar aim to reap the commercial rewards of rebuilding Syria now that the devastating civil war has ended and sanctions on Damascus have been lifted. Gulf investments are being deployed to secure an economic foothold in the country and seize the benefits of early investment in an underdeveloped, postwar market with significant opportunities driven by the country’s reconstruction needs.

Both countries cooperated in paying off Syria’s relatively small $15.5 million debt to the World Bank, but now appear to be competing over infrastructure investment, with each pursuing separate projects.

The Saudis confirmed a $2 billion investment in Syria’s “energy, aviation, real estate, and telecommunication” sectors on February 7. Riyadh’s announcement came on the heels of a three-way memorandum of understanding between U.S. energy giant Chevron, the Qatar-based Power International Holding, and the Syrian government to begin developing the country’s first offshore oil and gas field. 

These announced financial commitments reflect a regional effort to revive Syria’s war-ravaged economy, with $56 billion in foreign investment secured in 2025. However, much of this money is entering the country without adequate monitoring, creating opportunities for corruption and potential terrorism financing.

Regional Powers Grasp Commercial Opportunities

The main backers of Syrian President Ahmad al Sharaa’s regime, Qatar and Turkey, began circling even before President Donald Trump lifted sanctions in June 2025. In March 2025, Washington approved a Qatari plan to deliver natural gas to Syria via Jordan, while in May, Qatar’s Power International Holding, joined by two Turkish energy companies, reached an agreement with the authorities in Damascus to construct four power plants and a solar farm. Soon after the sanctions were lifted, Saudi Arabia pledged $6.4 billion to develop Syria’s tourism, medical, telecommunications, and entertainment sectors.  

Following Congress’s vote to repeal the sanctions on Syria outlined in the 2019 Caesar Syria Civilian Protection Act, capital inflow into Syria is expected to increase significantly. The central concern, however, is the lack of credible mechanisms to oversee how these funds enter and circulate within the Syrian market, particularly with respect to terrorism financing risks. The danger is heightened by the Syrian government’s integration of armed factions into its military that maintain ties to U.S.-sanctioned terrorist organizations such as al-Qaeda and Katibat al-Tawhid wal-Jihad, an Islamist paramilitary in Uzbekistan and Kyrgyzstan.

Syria’s Opaque Economy

Some commentators have expressed concern that the wave of foreign investment will fuel corruption within the Syrian government. As one Syrian analyst put it, “little information is being made available about the process by which these deals are being negotiated, how the partners are being selected, and the exact details concerning long-term ownership and operation.”

Two state institutions —the Higher Council for Economic Development, chaired by Sharaa, and the Syrian Investment Authority, whose leadership he also appoints — are in the driving seat for foreign investment. The two institutions have even pursued settlement agreements with officials and businessmen who served former dictator Bashar al-Assad, allowing them to reenter the market in exchange for commission payments. They include Mohammed Hamsho, who was sanctioned by the United States in 2011 for “acting for or on behalf of Syrian President Bashar al-Assad,” and for serving “as a front to mask a senior Syrian official’s illicit and licit financial and business transactions.”

U.S. Should Encourage Syria To Cooperate With FATF

There is presently no indication that Syria has been subjected to on-site monitoring by the Financial Action Task Force (FATF), the main international mechanism for assessing compliance with anti-money laundering and counter-terrorism financing. FATF monitoring typically relies on in-country evaluations. In Syria’s case, no visit has occurred, likely due to security considerations rather than Damascus’s refusal. Washington should encourage Damascus to facilitate an on-site FATF evaluation to assess Syria’s compliance.

Washington should also ensure the continued enforcement of sanctions against those business networks associated with the Assad regime that remain active in Syria, including individuals and entities that have reached an agreement with the Syrian government.

 Ahmad Sharawi is a senior research analyst at the Foundation for Defense of Democracies (FDD). For more analysis from Ahmad and FDD, please subscribe HERE. Follow Ahmad on X @AhmadA_Sharawi. Follow FDD on X @FDD. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.