Syria market reentry: FY 2026 NDAA opens doors, but risk management is key

Introduction

On December 18, 2025, President Donald Trump signed into law the Fiscal Year (FY) 2026 National Defense Authorization Act (NDAA), which includes a provision repealing the Caesar Syria Civilian Protection Act of 2019 (the Caesar Act). Although the repeal removes many of the remaining US sanctions-related barriers impacting business involving Syria, it is not a “green light means go full speed” for reentering the Syrian market. Instead, companies should proceed with caution. Though the Caesar Act is gone, other US restrictions vis-à-vis Syria still apply, US foreign policy shifts quickly, and today’s permissive posture could tighten again tomorrow at the stroke of a pen.

The Caesar Act 

The Caesar Act was enacted in 2019 during President Trump’s first term in response to widespread human rights abuses committed during Syria’s civil war by the Assad regime and its backers, Russia and Iran. The Act increased pressure on the Syrian government and its supporters by authorizing sanctions on persons who knowingly engaged in specified Syria-related transactions, including significant dealings with sectors tied to the Syrian state and its security services. The Act froze Syria’s integration into the global financial marketplace and made even indirect dealings with Syria a high-risk proposition for anyone who dared to engage.

Notably, the Caesar Act extended US jurisdiction over non-US companies and individuals with no US nexus who engaged in transactions involving Syria, however tenuous the link. Even where certain Syria-related activity was arguably permissible under other US primary sanctions regulations—or covered by a general license—the Caesar Act codified persistent secondary-sanctions exposure. This heightened risk resulted in banks minimizing their Syria exposure, eliminated Syrian financing, stalled joint venture and infrastructure projects in Syria, and increased enforcement attention in higher-risk industries. Except for a few states aligned with the Assad regime, it effectively ended the world’s transactional relationship with Syria.

Repeal of the Caesar Act

As part of the FY 2026 NDAA, Congress repealed the Caesar Act, thereby eliminating the final barrier to the second Trump administration’s 180-degree policy shift regarding Syria that began in May 2025. The repeal removes the broad secondary sanctions that have constrained commercial engagement for nearly six years. Importantly, there is no automatic snapback mechanism; the Caesar Act will not return simply because conditions in Syria deteriorate or policymakers change their minds. Reinstating Caesar Act sanctions would require new legislation, not just unilateral action by the executive branch. 

While repeal reduces one major layer of Syria-related risk, companies remain subject to restrictions under other US authorities: 

• Numerous Syrian individuals, entities, and state-owned enterprises continue to appear on the Office of Foreign Assets Control’s Specially Designated Nationals (SDN) list under executive orders addressing terrorism, narcotics trafficking, and human rights abuses.
• US counterterrorism and anti-narcotics sanctions still apply to actors linked to Hezbollah, ISIS, and Syrian narcotics networks.
• Export controls under the Export Administration Regulations also continue to restrict certain goods, technologies, and services destined for Syria. 

Recommendations for Syria Market Reentry 

The repeal of the Caesar Act opens the door for US and foreign businesses to enter Syrian markets, including in the infrastructure, energy, and banking sectors. This is a significant shift after years of near-total isolation of the Syrian economy; however, the opportunity is not without risk. The safest path forward involves robust compliance, planning, and contractual safeguards, such as the following:

• Incorporate force majeure clauses addressing the potential for reimposition, modification, and/or amendment to the Syrian sanctions regime, and include compliance covenants for counterparties on these issues.
• Enhance due diligence to screen Syrian partners for current designations and to monitor US government designations closely.
• Coordinate with compliance teams to ensure readiness for correspondent banking relationships and contingency planning for sudden regulatory shifts.
• Initiate early strategic engagement framed to align with NDAA benchmarks to mitigate reputational and compliance risks.
• Consult with internal and external legal counsel throughout the process. 

Conclusion

The repeal of the Caesar Act creates new commercial opportunities in Syria. Businesses should approach the Syrian market with cautious optimism and proactive risk management, including compliance planning and contractual safeguards.

Jeffrey W. Cottle | Partner | +1 202 383 0247 | Email
E. Patrick Gilman | Partner | +1 202 383 0195 | Email
Neal Higgins | Partner | +1 202 383 0168 | Email
Joshua Johnson | Counsel | +1 202 220 8648 | Email
Deanna Alsbeti | Staff Attorney | +1 202 220 8294 | Email
Megan Thomas* | Intern | +1 202 383 0241 | Email

_{*Not admitted to practice}

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If you have any questions about this Legal Briefing, please feel free to contact any of the attorneys listed or the Eversheds Sutherland attorney with whom you regularly work.