Russia Helps Syria Evade U.S.-European Economic Sanctions

I read the Wall Street Journal's report early yesterday, "Syria's Russian Connection: Regime Attempts to Sidestep Sanctions by Using Foreign Banks in Oil Sales."

And CNN had an interesting segment yesterday afternoon, and the video clip is here "Syria, Russia plans to bypass U.S.-EU sanctions?"

WSJ's report is behind the paywall, but the Current.Mil-Tech.News blog cross-posted it. An excerpt:

Syria's embattled regime laid plans to use Russian banks as part of an emergency effort to sidestep American and European sanctions on oil and financial transactions, according to Syrian government documents and correspondence reviewed by The Wall Street Journal.

The documents offer an inside look at how a shrinking group of regime loyalists is working to prop up Bashar al-Assad's government. Over the past several weeks, senior Syrian officials have held a series of meetings to discuss how to conduct business after being cut off from most Western banking institutions and trade, the documents indicate.

The documents, which span a period from March until early July, also underscore the difficulties facing Western governments in sustaining comprehensive sanctions against Syria, as long as Damascus keeps its strong diplomatic alliance with Moscow. Earlier this month, Russia received a delegation of top Syrian economic officials, including its oil and finance ministers, to discuss the possibility of government loans and long-term oil deals, Syrian Deputy Prime Minister Qadri Jamil said in a news conference.

The sanctions, which began last year and were strengthened this spring, are aimed at Syria's oil and financial sectors. The unilateral actions are coordinated by Western and Middle Eastern countries allied against Syria, but aren't legally binding on Russian and other companies that don't have operations in the U.S. or Europe. Russia and China have used their veto power at the United Nations Security Council to block the possibility of international sanctions.

A cache of documents reviewed by the Journal includes what appears to be authentic correspondence between Syrian government officials and certain foreign companies. In interviews with the Journal, some people who were parties to correspondence confirmed details. None of the people reached by the Journal questioned the authenticity of documents referenced in this article, although some denied conducting any business with Syrian entities.

Syria isn't a globally significant oil producer. The 360,000 barrels of crude it pumps daily represent less than 1% of the world's daily oil production. But Syria's oil sales are one of the last sources of foreign currency for President Assad.

The roughly 150,000 barrels per day Syria has available for export, after its domestic needs are met, are worth approximately $380 million per month at current prices. That is a key reason why the U.S. and the European Union targeted Syria's state oil companies, its central bank and financial sector. The sanctions have cut Syria off from its traditional buyers in Europe, including in Italy, Germany and Spain...

The Syria crisis reminds me of Cold War international politics, which I've written about previously. See: "U.S. to Focus on Forcibly Toppling Syrian Government."