16 August 2012by Andrey Dolmov, JTW
MOSCOW--Despite imposed sanctions by the EU and the United States, Syria can avoid the sanctions with the help of Russia. A proposal was made by officials of the Syrian financial and oil sector that can circumvent the effect of the sanctions on the financial transactions.
According to the Wall Street Journal, the establishment of offshore companies, which can be effected through a change in the laws, can avoid difficulties in financial transactions.
The imposed economic sanctions hindered the cash flow on the normal banking channels and became a major obstacle to Syrian oil exports. By establishing offshore corporations, international transactions can be made anonymously and thereby avoid economic sanctions. These companies can be established in Russia and Malaysia.
Two Russian banks are intended, the Gazprombank and the Novikombank, where the profits from the sale of the exported Syrian crude oil can be transferred. So far both banks denied having any business relations with Syria.
Currently, Syria promotes 360,000 barrels of crude oil a day. 210,000 barrels are required for its own consumption. Would the Syrian government be able to export the rest, the Syrian Central Bank would receive about 380 million dollars extra per month. Due to economic sanctions imposed, the foreign reserves of the regime decreased since the last year from 17 billion US dollars to less than 10 billion US dollars.
For this reason, on 4 August, a delegation under the Syrian Deputy Prime Minister, Kadri Jamil, traveled to Moscow to request for economic and financial assistance from his allies. The meeting was mainly focused on the supply of oil, oil products and gas from Russia to Syria. According to the compromise, Syria should deliver crude oil to Russia and receive in exchange oil products and fuel, which are becoming increasingly scarce and are necessary for the military and industry.
Before the sanctions were imposed, 95 percent of Syria's oil exports flowed to EU countries, and the oil revenue had accounted for a quarter of the Syrian government budge. If Syria succeeds with the help of Russia in avoiding the imposed economic sanctions, it would be a serious blow to the efforts of the international community to isolate Bashar al-Assad’s regime.