Al-Assad supplements his treasury with UN assistance funds
Enab Baladi – Zeinab Masri
In recent months, the United Nations (UN) has frequently provided political support and cooperated with the Syrian government beyond the framework of humanitarian aid. The UN’s financial and statistical reports reveal that UN agencies operating in regime-controlled areas have provided the government’s treasury with funds and foreign exchange, claimed to be for purchases and services.
These reports also show that UN agencies have carried out financial transactions with Syrian institutions placed on the international sanctions list. Therefore, some activists and human rights organizations demanded that the UN aid be supervised, monitored and “reformed.” Moreover, the UN must act with transparency to ensure that its operations in Syria comply with the “Parameters and Principles of UN Assistance in Syria.”
Millions of US dollars placed in the Syrian regime’s pocket
The 2020 Annual statistical report on UN procurement indicates that UN agencies purchased 244.5 million USD worth of goods and services in Syria last year.
Procurement data newly released by the Foundation for Defense of Democracies (FDD) highlighted the fact that the UN procurement website lists no suppliers for 212 Syria-related contracts, with a total value of 44.4 million US dollars. Instead, it only mentions the supplier’s name was “withheld for security reasons or privacy reasons,” even though the UN procurement website lists all suppliers who received contracts worth 30,000 US dollars or more.
FDD is a Washington, DC-based non-profit research institute, established in February 2008, focusing on foreign policy and national security.
FDD conducts in-depth research, produces accurate analyzes, identifies illicit activities, and provides policy options, intending to enhance US national security and to reduce or eliminate threats posed by adversaries and enemies of the US and other free nations, according to its official website.
The procurement data, issued on 22 July, said that the UN’s continual awarding of contracts to regime-operated entities illustrates the extent to which “the Syrian dictator has turned humanitarian aid into a source of income for his cash-strapped government.”
The data pointed out that Assad is effectively bolstering his finances with US and European taxpayer dollars, given that donations from the US and its allies are the primary source of funding for UN aid.
In other words, the diversion of aid undermines the effectiveness of US and EU sanctions aimed at reducing the regime’s ability to fund its war effort, which involves deliberate atrocities against civilians.
Speaking with Enab Baladi, Karam Shaar, a Syrian economist and researcher at the Middle East Institute in Washington, said this amount of money (in reference to 44.4 million US dollars) was deductible from amounts included in the 2020 Annual Statistical Report on UN procurement, which contains only the value of contracts awarded by the UN to other institutions to implement its projects, programs and operations.
For example, the UN communicates with a hotel company inside Syria and asks it to accommodate its personnel in return for paying the accommodation fees.
Shaar added that the UN had paid substantial sums to companies such as the Haram Money Transfer Company or the Four Seasons Hotel. These companies are closely associated with the Syrian regime, especially the foreign exchange companies that are intrinsically linked to the Syrian government. So, the UN’s relation with these companies is not just operational. They carry out transactions with the Central Bank of Syria on a daily basis.
Shaar believes that the Syrian regime is benefiting directly and indirectly from the contracts awarded by the UN. The Syrian regime profits most from the exchange rate difference between the black market and the official market.
When the UN contracts with companies in regime-held areas, it makes its payment in Syrian pounds based on the official exchange rate set by the Central Bank of Syria, not according to the black market exchange rate, which is closest to the actual value.
The price determined by the Syrian government is not the actual value, and the difference between these two prices is a “gain” for the regime’s treasury.
The exchange rate currently applied to UN agencies is 2,500 Syrian pounds to the US dollar, while the pound’s value on the black market reached approximately 3,280 pounds to the dollar (28 percent higher).
UN continues to spend money on Four Seasons Hotels in Damascus
The FDD report highlighted that UN agencies spent 14.9 million US dollars last year on housing and other services at the Four Seasons Hotel in Damascus, with total spending of 70.1 million US dollars at the hotel since 2014.
In the 2016 investigation, the Guardian newspaper revealed that the UN awarded contracts with tens of millions of dollars to people closely associated with the head of the Syrian regime, Bashar al-Assad, as part of an aid program.
The investigation said that businessmen whose companies are subject to US and EU sanctions received substantial funds from the UN mission, as did government departments and charities. The charities include one established by Asma al-Assad, the wife of the head of the Syrian regime, and another by his cousin, businessman Rami Makhlouf.
UN agencies paid the Four Seasons Hotel, partly owned by Assad’s Ministry of Tourism, approximately 9.3 million US dollars.
When questioned, the UN said that the hotel was the safest place for its staff to stay in the war-torn Syrian capital. But, even after the front lines moved to governorates far from Damascus, UN staff remained at the Four Seasons, according to the FDD report.
According to physician and public health scholar Annie Sparrow, the Assad regime forced the UN to place its staff at the hotel.
Four Seasons Hotels and Resorts dropped its Damascus branch after the US Treasury imposed economic sanctions on 16 people and entities close to al-Assad in June 2019, including the owner of the Four Seasons Hotel, Samer Foz.
Non-functional monitoring group
After many international media outlets and human rights organizations documented the Syrian regime’s systematic expropriation of humanitarian assistance, the UN issued a document called “Parameters and Principles of UN Assistance in Syria,” and set up a monitoring group charged with ensuring its implementation.
However, the monitoring group has not convened even once, owing to Secretary-General Antonio Gutterres’ reluctance “to antagonize either Assad’s Russian patrons or the UN field agencies resentful about being criticized,” the FDD quoted a former UN diplomat Carsten Wieland in a book published in July 2021.
The FDD called on the secretary of state and UN ambassador to establish a consortium of major UN donors to press for the reform of UN aid to Syria jointly and ensure greater transparency about contract recipients whose names are currently withheld for alleged reasons of privacy or security.
The FDD also demanded that Congress consider making US financial support for that assistance contingent on swift UN reforms.
Involving al-Assad in receiving aid allocated to northwestern Syria
Before the UN Security Council voted to extend the authorization of the cross-border mechanism for the delivery of humanitarian aid into Syria via Turkey one more year, the UN called on the council to involve the Syrian regime in the delivery of this aid. This followed a similar US proposal posed as a solution to Russian efforts to limit the aid route through the regime-controlled areas. However, Russia changed its position not to object to the mechanism.
Stéphane Dujarric, the spokesperson for the Secretary-General of the UN, said on 7 July, “We also want to use and have been using to a lesser ex… been using the cross-line[ that is, under the supervision of the Syrian regime], though there’s been more challenges there because of the ongoing fighting.”
The spokesman for the Secretary-General of the United Nations, Stephane Dujarric, said on 7 July, “There is an urgent need to be able to continue distributing cross-border aid, and we also want to provide aid across the lines (that is, under the supervision of the Syrian regime), despite the fact that there are more challenges there because of the ongoing fighting.”
The US ambassador to the UN, Linda Thomas-Greenfield, suggested to the Security Council members to “expand all forms of assistance to Syrians in need-cross-border, as well as cross-line,” which means part of the humanitarian aid will be delivered under the supervision of the Syrian regime.
Economic researcher Karam Shaar pointed out that the activities of the UN agencies in the regime-controlled areas and the money they pump are identified as the main reasons why the Syrian regime insisted that all cross-border humanitarian aid be delivered through the areas under its control.
Shaar pointed out that politicians talked a lot about the possibility of limiting the delivery of humanitarian aid via Syrian regime-held areas, neglecting the fact that this would bring economic benefits to the Syrian regime, primarily via the exchange rate differences.
If the UN increases its effectiveness in dealing with the Syrian regime politically and financially, it would not contradict the sanctions imposed by the EU on individuals and entities closely associated with the regime. This is because the UN deals with the principle that the sanctions imposed on the regime are unilateral and not UN sanctions, unlike the sanctions imposed on North Korea or Iraq during Saddam Hussein’s rule.
The US and EU sanctions affect the work of the UN agencies, but they do not mean anything to them in terms of compliance, according to the researcher.
How does the UN support the regime?
Over the past few months, UN agencies started to provide support to the Syrian regime, in addition to humanitarian aid.
On 12 July, the UN Development Program in Syria (UNDP Syria) announced on its official Facebook account the launch of the annual international competition for the Hult Prize, with the participation of all Syrian universities. In the post, UNDP Syria indicated that the competition would be held on Syrian university campuses in cooperation with Assad’s Ministry of Higher Education and the National Union of Syrian Students.
The UN’s statement was addressed to Syrian university students interested in volunteer work, and the winner will receive the award and be a representative of the Hult program. The UN attached the registration link for students wishing to join until 15 July.
The National Union of Syrian Students, according to the description of the Union on its official website, is a popular organization that was established in April 1963. It includes students of the Syrian public and private universities and higher institutes, with branches inside and outside Syria.
On 20 June, the Syrian regime assigned a permanent representative to the UN Office for Combating Drugs, Crime and External Judicial Affairs in Vienna. Ironically, many reports said that Syria is a narco-state with two primary drugs of concern: hashish and Captagon. A research released by the Center for Operational Analysis and Research—which focuses on Syria— talks about Syria becoming “the global epicentre of Captagon production, which is now more industrialised, adaptive, and technically sophisticated than ever.”
On 14 June, the UN Special Committee on the Situation with Regard to the Implementation of the Declaration on the Granting of Independence to Colonial Countries and Peoples elected by acclamation Syria’s Permanent Representative to the UN Bassam Sabbagh as its rapporteur.
On 28 May, the World Health Organization (WHO), at its 74th session, unanimously elected Syria to its Executive Council, among other members who had recently joined the council. This sparked international and domestic condemnation.
On 6 January, the WHO used the US-sanctioned Syrian airline “Cham Wings” to transport 16 tons of medicines, supplies and medical equipment from the organization’s warehouses in Dubai, UAE, to Benghazi, Libya.
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