Al-Assad regulates foreign currency market with decrees “5” and “6”

A $100 note - July 31, 2023 (Enab Baladi)

A $100 note - July 31, 2023 (Enab Baladi)


Enab Baladi – Khaled al-Jeratli

The Syrian regime tries to control the movement of foreign currencies and restrict them to official channels, in order to maximize its profits, which was evident through decrees “5” and “6”. These decrees define penalties for handling non-Syrian pound currencies, practicing currency exchange without a license, and transferring or remitting foreign currencies outside of Syria.

The two decrees brought with them amendments to previous decrees, which had led to an outcry and panic at the beginning of 2020. They stipulated stricter penalties for transactions in currencies other than the Syrian pound, following which criminal security patrols became more active, arresting individuals accused of dealing in foreign currencies.

But the regime government attached a series of measures to the decrees at the time to mitigate their impact, especially concerning traders who considered them obstructive and sometimes threatening to their business and industrial activities. Following the issuance of the decrees, Enab Baladi reported that major industrialists and traders were demanding facilitation in obtaining foreign currency to fund their imports.

What’s new?

On January 20, the Syrian regime’s president, Bashar al-Assad, issued two legislative decrees related to dealing in non-Syrian pound currencies, practicing currency exchange without a license, and transferring or remitting foreign currencies outside of Syria.

In decree number “5” for the year 2024, the emphasis was placed on previous bans on using currencies other than the Syrian pound for payments or any type of commercial trading. It maintained penalties related to imprisonment but allowed for the accused to reach a “settlement” with the judiciary to drop the possibility of imprisonment, which in some cases could exceed seven years.

Decree “5” does not apply to non-residents or foreign investors in Syria, as foreign trade transactions are not considered a punishable crime under this decree, nor is possession of foreign currency and precious metals considered criminal by law.

Regarding currency exchange and money transfers abroad, decree number “6” for the year 2024 showed a tightening of penalties for practicing the currency exchange profession without a license and for those transferring or remitting local and foreign currencies between Syria and abroad without a license.

The decree imposes a temporary imprisonment penalty ranging from five to fifteen years and a fine amounting to three times the seized amounts, with no less than 25 million Syrian pounds, in addition to confiscation of the seized cash, and any amounts recorded in paper or electronic records, with no possibility of bail in these two crimes.

Amendment of previous decrees

The two legislative decrees amended their older version, which was labeled “Legislative Decree No. “3,” where this decree imposed a prison sentence and a financial penalty on those dealing in non-Syrian pound currencies.

This was followed in 2020 by another decree that intensified the penalty for dealing in foreign currency, from three years imprisonment at maximum to seven years of imprisonment with hard labor.

It also prescribed “a financial penalty equivalent to double the value of the payments or the amount dealt with or paid, or the services or goods offered,” in addition to the confiscation of the involved payments or amounts or precious metals for the benefit of the Central Bank of Syria (CBS).

Decree number “4″ of 2020 also imposed a “temporary detention penalty, and a fine ranging from one million to five million Syrian pounds, for anyone who broadcasts, publishes or republishes fabricated incidents or false or illusory claims by any means, for the purpose of causing depreciation or instability in the national currency notes or their exchange rates as determined by the official bulletins, and to undermine the confidence in the solidity of the state’s currency and bonds.”

Seeking gains

Decisions related to controlling the handling of foreign currencies have always been frequent on the agenda of the Syrian government over the past years, and their pace increased after 2021 when the Syrian pound registered a series of declines in its value.

This focus was manifested in a series of decisions, the latest of which was on June 27, 2023, when the Central Bank of Syria issued a decision to regulate the possession of foreign currencies by residents in Syria, and the entry and exit of the Syrian pound and foreign currencies for incoming and outgoing travelers.

The decision specified the maximum amount of Syrian pound and foreign currencies allowed for entry and exit by departing and arriving Syrians or residents in Syria or foreigners, in addition to confirming the permission to hold all payment methods issued in foreign currencies and bank cards, regardless of their value, on condition that they are used through banks and currency exchange institutions operating in Syria and any entities authorized to deal in foreign exchange.

The assistant researcher at the Jusoor for Studies center, Abdul Azim al-Mugharbel, told Enab Baladi that the decrees related to controlling the handling of foreign currencies aim to affirm the prohibition of dealing in foreign currencies within financial operations that do not return real economic benefit, such as daily exchange transactions and the activity of money transfer offices.

The researcher believes that the government’s activity focuses on achieving the greatest possible gains, through the benefits gained from penalties and monetary tightening to ensure that foreign currencies do not leak outside the Central Bank of Syria.

Pre-fabricated charges: Terrorism and money laundering

During a panel discussion aired by the official Syrian TV channel regarding the recent decrees, the director of legal affairs at the Central Bank of Syria, Magdy Abu al-Fakhr, said that al-Assad’s decisions are a “continuation of maintaining national sovereignty,” considering the Syrian currency as part of this “sovereignty.”

Abu al-Fakhr added that Syria is currently in a “transitional phase” as it heads towards a phase of “reconstruction,” and is working to attract foreign investors. He considered that this phase requires tightening measures “even if by prosecution” because unlicensed companies that work on remitting foreign currency place the state, government, and central bank away from “statistics.”

He considered working without a license as raising suspicions of money laundering and terrorism financing crimes because remittances outside of supervision lead to such suspicions. To achieve what Abu al-Fakhr described as “general deterrence and specific deterrence,” the tightening of the “surveillance” law was emphasized.

During the same panel, the first financial investigator in Damascus, Fouad Sukkar, talked about how the most important amendments brought by the decrees are the cancellation of the work by legislative decrees “53” and “54,” as they set the penalties progressively based on the total handling of foreign currency.

In details of the amendments, a set of items came to determine penalties for those exchanging currencies and dealing with foreign money as follows:

  • The punishment is imprisonment from one to three years if the total transaction or offer does not exceed ten thousand US dollars or its equivalent in other foreign currencies or precious metals.
  • Temporary imprisonment is the penalty if the transaction or offer reaches ten thousand dollars and does not exceed fifty thousand US dollars or its equivalent in other foreign currencies or precious metals.
  • The punishment is temporary imprisonment for at least seven years if the transaction or offer exceeds fifty thousand US dollars or its equivalent in other foreign currencies or precious metals.
  • In all cases specified in items (1-2-3), the same paragraph shall impose a fine equivalent to double the value of the payments or amounts dealt with or paid in place of the crime or the goods and products and services offered.
  • The Central Bank of Syria is considered a personal litigant in the crimes stipulated in this article, and the estimation of civil compensation is left to the court.

Judge Fouad Sukkar described the new amendments as containing a “classificatory standard” for the crime of dealing in foreign currencies, based on the size of the transaction itself.

Legislative decree number “5” stipulated that if the accused carries out a “settlement” before the judiciary before a final judicial decision is issued in the crimes provided for, the public lawsuit against him shall be dropped, and he shall be exempted from civil compensation.

The “settlement” takes place before the judicial authority looking into the lawsuit, and the amount of “settlement” is determined by a decision from the same authority, equal to the value of the payments and amounts dealt with caught in kind, and recorded in paper and electronic records, and in documents and papers that carry financial values, or the value of the goods, products, services, and commercial transactions offered in non-Syrian pound. What is seized in kind is considered part of the value of the “settlement,” and the resulting amounts and seizures from the “settlement” revert to the state’s general treasury.

Is it impactful?

The view of the Syrian regime’s government is partially reflected in what it wants from these decrees, as it tries to bring the movement of foreign currency in Syria under control, according to the director of legal affairs at the Central Bank of Syria, Majdi Abu al-Fakhr.

However, the law has not left a clear impact on the currency exchange rate over the past years, nor has it imposed itself on the local markets, as merchants and citizens continued to deal in foreign currencies due to the deterioration of the Syrian pound’s exchange rate and its continuous fluctuation.

The exchange rate of the Syrian pound reached 14,900 against the US dollar at the time of this report, according to the S-P Today website, which specializes in monitoring the rates of foreign currencies.

Abdul Azim al-Mugharbel, a research assistant at Jusoor for Studies center, did not expect the changes to have an actual impact regarding the regulation of the local currency’s rates, as he sees that the measures are not sufficient to stop the continuing deterioration of the Syrian pound because financial and monetary policies are ineffective in the current economic situation.

He added that transactions with foreign currencies in the black market continue even by the Syrian regime itself.

Al-Mugharbel pointed out that these decisions might encourage some traders to turn to the black market after the authority of “settlement” was transferred from the security branches to the judiciary, and the dismissal of public prosecution against the dealer, and exemption from civil compensation was granted if the “settlement” took place before a judicial ruling is issued.

A law to regulate foreign currency possession

In June 2023, the Central Bank of Syria issued a decision to regulate the possession of foreign currencies by residents in Syria, and the entry and exit of the Syrian pound and foreign currencies by newcomers and departees.

According to the decision issued by the bank’s Monetary and Credit Council, holding all means of payment issued in foreign currencies and bank cards is allowed, regardless of their value, provided they are dealt with through banks and exchange institutions operating in Syria, and all entities authorized to deal with foreign currency.

The decision allowed anyone arriving in Syria, except those transiting through airports and ports, to bring in amounts in Syrian pounds regardless of their value, provided they declare it to the Syrian Customs Authority.

A departing Syrian resident and those of similar status, as well as non-Syrian residents, are allowed to take out a sum not exceeding 500,000 Syrian pounds only, while the amount for departing Arabs or non-resident foreigners cannot exceed 50,000 Syrian pounds.

The Central Bank clarified within the decision that amounts in foreign currencies exceeding those specified to be allowed for entry and exit are to be treated as cargo and are subject to the decisions issued by it.

It also pointed out that customs authorities at border centers, airports, and ports are committed to organizing a record for amounts in excess of the permitted entry and exit limits, whether in Syrian pounds or foreign currencies.

The bank threatened to apply penalties provided by the relevant current regulations and laws in case of any violation of this decision’s provisions.

During the past two years, the policies followed by the Syrian regime’s government in dealing with foreign currencies varied, including facilitations for merchants and industrialists to buy them, calls to citizens to obtain them through official outlets to avoid counterfeit ones, and requests to stop buying dollars to support the pound, while dealing with it and talking about it remain criminalized.


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