The Caesar Act and the United Arab Emirates

Like Iranians, Cubans, North Koreans, and Sudanese, the Syrian people have become used to life with US-imposed sanctions. In fact, they date back to 1979. 

Yet Washington’s new sanctions under the so-called Caesar Act, which the Treasury Department began implementing on June 17, stand out from past sanctions targeting Damascus. 

At previous points, Washington’s sanctions targeted firms doing business with sanctioned Syrian individuals. Those sanctions required proof of such direct dealings. To be in violation of the Caesar Act, however, a company only has to be involved in certain regime-dominated sectors of the Syrian economy such as banking, construction, military aircraft, engineering, gas, oil, etc. 

In sum, these latest sanctions will be the most sweeping ones that Washington has ever imposed on Syria. 

Although supporters of these sanctions claim that the Caesar Act is designed to bring accountability to the Syrian government for its human rights abuses since 2011, there are geopolitical motivations driving Washington’s financial warfare against Damascus. 

Possibly some of the Trump administration’s goals include pressuring Syria into ending its alliance with Iran, severing the Baathist regime’s ties with Lebanese Hezbollah and various Palestinian factions, creating a US-friendly political order in Damascus, making political concessions to various American-backed Syrian factions, and giving up sovereign claims to the Israeli-occupied Golan Heights. 

It is doubtful that these sanctions will achieve such objectives. Yet the Caesar Act will inevitably create much additional misery for average Syrians, although probably not powerful and wealthy figures linked to the regime. 

Unfortunately, against the backdrop of 80 percent of Syrians already living in poverty and their currency collapsing, the risks of widespread famine are increasing and these sanctions are already making the situation much worse for ordinary citizens who have nothing to do with their government let alone its crimes. 

Implications for Washington’s Gulf partners

The media has focused heavily on the Caesar Act’s implications for the Syrian government and its main external backers—Russia, Iran, and Lebanese Hezbollah. But at the same time the sanctions also raise stakes for US partners in the Gulf Cooperation Council (GCC). 

As explained by Samuel Ramani, a doctoral researcher at Oxford University, out of all Gulf Arab states, the United Arab Emirates (UAE) will be most negatively impacted by the Caesar Act.

In late 2018, the UAE and Bahrain restored relations with Bashar al Assad’s government. Abu Dhabi and Manama’s decisions to do so boosted the Syrian regime’s standing and its efforts to escape the grip of regional isolation. 

Having developed deeper ties with Russia and an increasingly aggressive "anti-Islamist" foreign policy in recent years, the UAE had its own interests in restoring bilateral relations with Damascus. 

Facts on the ground in Syria and the Assad regime’s vitriol for the Muslim Brotherhood, Turkey, and Qatar all contributed to Abu Dhabi’s thinking that a rapprochement with Assad would be strategically and morally sound.

Since restoring official relations with Syria, the UAE showed its commitment to helping Syria rebuild, redevelop, and reintegrate into the Arab world’s diplomatic fold after years of being left in the cold by the Arab League. 

In January 2019, the Emiratis hosted a trade delegation from Syria which a Treasury Department-targeted ally of Assad, Muhammad Hamsho, led. 

Also, in August 2019 private Emirati companies such as Arabtec had a presence at the Damascus International Trade Fair. In March 2020, the Crown Prince of Abu Dhabi Mohammed bin Zayed announced that he had a phone call with Assad, in which the UAE’s de facto ruler promised Emirati help for Syria in terms of coping with Covid-19. 

Experts who kept a close eye on Syria-UAE relations were not surprised when any of these developments unfolded. Even earlier on in the Syrian crisis, shortly after Abu Dhabi officially cut off ties with Damascus in 2011, the Emirates remained a financial hub where Assad regime officials parked much of their wealth during the darkest periods of the Syrian civil war. 

Also, in August 2018, a few months before the two governments’ official rapprochement, a major Emirati investor purportedly had plans for a project in Marota City which he discussed with Syria’s government. 

Despite the US and UAE’s close relationship, the Syrian file has fueled a degree of tension between Washington and Abu Dhabi. The American and Emirati governments do not agree on questions about Assad’s legitimacy and how to deal with the Damascus regime. 

One of the reasons why Washington has embraced the Caesar Act as a strategy for advancing America interests in Syria has to do with the US goal of slowing down the rapprochements between Assad’s government and Arab states like the UAE. 

The day that the Caesar Act went into effect, US Special Representative for Syria Engagement James Jeffrey spoke at a press conference about the sanctions’ implications for the UAE. He warned that Emirati individuals and businesses could be hit with sanctions if the UAE continues re-embracing Assad’s government. 

As Jeffrey put it, officials in Abu Dhabi are aware that Washington is “absolutely opposed” to Arab states re-opening their diplomatic missions in Syria, as the UAE and Bahrain did in December 2018, and some analysts believe Saudi Arabia will also do before too much longer. 

“They’re sovereign countries; they can make these decisions. But we have made it clear that we think this is a bad idea.”

Not seeing eye-to-eye on “Iranian threat”

As Ramani argues, the Caesar Act will prevent the UAE from playing a significant role in Syria’s reconstruction, which Abu Dhabi saw as “a way of creating a Syrian state that would be less dependent on Iran and more equipped to resist future coercion from Turkey.” 

Thus, although officials in Washington and Abu Dhabi both share concerns about Iranian influence in Syria and the Arab world at large, the US and UAE have different views about how to best counter Tehran’s hand. 

Looking ahead, officials in the UAE are considering how US foreign policy could change if former Vice President Joe Biden wins this year’s presidential election. If a Biden administration would conduct a foreign policy that is less UAE-friendly than the current administration’s, Ramani posits that the UAE would likely become “more cautious about trying to evade sanctions like it has done in Libya.”

Yet it would be mistaken to assume that the Caesar Act’s implementation will mark the end of the UAE’s quest to help Syria with major reconstruction efforts. The UAE has strong lobbying capabilities in Washington. 

Through such networks in the American capital, the UAE may have some luck in terms of pushing the US foreign policy establishment toward viewing the Caesar Act as more of a gift to Iran, rather than a way of undermining Tehran’s interests. 

To that point, there seems to be good reason to expect the Iranians to successfully exploit the new US-imposed sanctions on Syria. Why is that? Without countries such as the UAE along with Kuwait, Malaysia, and Russia being able to involve themselves in any project in Syria without the fear of the Treasury Department going after them and cutting them off from US markets, the Syrian government will likely become even more dependent on Tehran, which has basically nothing to lose given the extent to which Iran is already choked by Washington’s sanctions on the Islamic Republic. 

Perhaps officials in Washington will later conclude that by preventing the Emiratis and others from investing in Syria’s “post-war” economy, the Caesar Act ultimately paved the way for Iran to essentially become the only outside actor that Syria had the option of turning to for help with reconstruction.