Bloomberg News

EU, U.S. Toughen Syria Sanctions as UN Says Death Toll Rises

December 02, 2011

(Updates with Syria suspending agreement with Turkey and membership in union in 13th paragraph.)

Dec. 2 (Bloomberg) -- The European Union and the U.S. toughened sanctions against Syrian President Bashar al-Assad’s government, while the United Nations said the estimated death toll from his crackdown on dissenters this year exceeds 4,000.

“Trade in Syrian public bonds and the provision of insurance and reinsurance to the Syrian government will be prohibited in the EU,” the 27-nation bloc said yesterday in a statement. “Syrian banks will no more be allowed to open new branches in the Union nor establish joint ventures or correspondent banking relations with European financial institutions.”

The EU also halted new commitments for grants and concessional loans by EU countries to the Syrian government, except for humanitarian purposes. The U.S. Treasury said yesterday it imposed economic sanctions on the maternal uncle of al-Assad, Muhammad Makhlouf, and on a commander of Syria’s elite 4th Armored Division, General Aus Aslan.

Al-Assad faces growing economic and political pressure to end the crackdown on protests that began in mid-March, inspired by movements that toppled leaders in Tunisia, Egypt and Libya. The violence has moved Syria closer to a civil war as military personnel defect and take up arms against the government.

Kuwait advised its citizens to leave Syria because of the “unstable” situation, state news agency KUNA reported, citing a foreign ministry statement.

UN High Commissioner for Human Rights Navi Pillay told journalists in Geneva yesterday that her organization estimates that more than 4,000 people have been killed since the uprising against al-Assad began. Human-rights activists put the figure at more than 4,500.

‘Proxies’ for al-Assad

Makhlouf, father of Syria businessman Rami Makhlouf, has been one of the people “al-Assad used to make and move money,” according to an e-mailed U.S. Treasury statement. “Makhlouf ensured that assets in nearly all sectors were controlled by businessmen who were willing to act as proxies for the al-Assad regime in return for profits.”

Aslan is a commander of the “key regime protection unit,” the Treasury said.

The U.S. also applied sanctions on Syria’s Military Housing Establishment, a company controlled by the Defense Ministry that provides funding for the regime, and the Real Estate Bank, the country’s second-largest bank, which administers the government’s borrowings, the Treasury said.

The sanctions bar “U.S. persons” from engaging in transactions with the designated entities and blocks any assets they may have under U.S. jurisdiction, the Treasury said.

Turkish Sanctions

Turkey imposed sanctions on Syria Nov. 30 and will expand the punitive measures if al-Assad fails to halt his crackdown on dissent, Turkish Foreign Minister Ahmet Davutoglu said. Syrian government assets held in Turkey are being frozen, al-Assad’s leadership team is banned from entry, transactions with Syria’s central bank and trade bank are prohibited, credit agreements are suspended, and arms sales and shipments have been halted, he told reporters in Ankara.

The latest measures follow sanctions adopted by the Arab League against Syria on Nov. 27, after the Damascus government refused to admit Arab observers into the country. The measures include a freeze on Syrian assets, a travel ban on senior officials in al-Assad’s government and dealings with the Central Bank of Syria.

Free Trade Accord

Syria suspended yesterday its free trade agreement with Turkey, and its membership in the Union for the Mediterranean in response to the sanctions imposed by the EU, which the foreign ministry in Damascus said were a “flagrant violation” of the country’s sovereignty, the state-run Syrian Arab News Agency reported. The union is an initiative that aims to strengthen relations between the EU and countries in North Africa and the Middle East.

Syria’s $60 billion economy, which grew 5.5 percent in 2010, may shrink 2 percent this year, according to the International Monetary Fund, or at least 5 percent, according to the Institute of International Finance. The government expects growth of 1 percent, Finance Minister Mohammad Al-Jleilati said in September.

--With assistance from Terry Atlas and Nadeem Hamid in Washington, Jennifer M. Freedman in Geneva and Emre Peker in Ankara. Editors: Heather Langan, Eddie Buckle

To contact the reporters on this story: Massoud A. Derhally in Beirut, Lebanon at mderhally@bloomberg.net; Jones Hayden in Brussels at jhayden1@bloomberg.net

To contact the editors responsible for this story: Andrew J. Barden at barden@bloomberg.net; James Hertling at jhertling@bloomberg.net


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