Lebanon weighs options after US move: Fuel smuggling or legal trade with Syria?

Report by Bassam Abou Zeid, English adaptation by Yasmine Jaroudi

Following the fall of the Assad regime, the U.S. Department of the Treasury announced on January 6 a partial easing of sanctions imposed on Syria. 

The gradual implementation of these measures over the next six months aims to facilitate the provision of essential goods and services, particularly electricity, energy, water, and humanitarian supplies. The easing also includes allowances for financial transactions related to these necessities.

The sanctions relief extends to Syria's neighboring countries, including Lebanon, where officials and businesses have explored potential benefits. Some have suggested that Lebanon could leverage this opportunity to legally re-export imported goods to Syria or export locally manufactured products.

Lebanese Energy Minister Walid Fayyad, after observing a surge in fuel smuggling from Lebanon to Syria, raised concerns with U.S. Ambassador Lisa Johnson. 

Fayyad proposed that Lebanese importing companies and the government could legally benefit from the relaxed sanctions by re-exporting imported fuel to Syria in a regulated manner, rather than allowing illegal smuggling operations to flourish.

However, the response so far has indicated that the eased sanctions apply strictly to government-led humanitarian efforts rather than private enterprises. This means that Lebanese companies remain unable to capitalize on the new framework.

As Lebanon grapples with ongoing economic difficulties, the next government will face the dual challenge of curbing illegal smuggling to Syria— which continues to channel millions of dollars into illicit networks— while allowing private companies to benefit from the new regulations legally.