The US Caesar Act: Another Violation of Lebanese Sovereignty?

Policy Analysis by Rhea Haddad. Staff Writer

June 25th, 2020

“In the absence of justice, what is sovereignty but organized robbery?” notes Saint Augustine.

Over the past few months, Lebanon has been beset by disruptions and poor decision-making that have spawned a political crisis, widespread social unrest, and plunged its economy deeper into crisis. While many of Lebanon’s plagues are rooted in years of financial mismanagement and a culture of corruption, some are beyond Beirut’s control – such as the agenda’s of foreign powers, coronavirus pandemic, and the war next door in Syria. 

 Currently, a new series of wide-ranging restrictions by the United States threaten to add to Lebanon’s troubles. Analysts warn that the Caesar Act could foster greater political instability and conflict in Lebanon over the divisive issue of ties with Syria and Hezbollah’s outsized role in the country, at an intricate time when negotiations with the International Monetary Fund (IMF) are ongoing and Lebanon is an a spike of economic chaos. 

 In simple terms, the Caesar Syria Civilian Protection Act is also known as Caesar Act. It is named after a Syrian military photographer who leaked pictures of abused and tortured people by the Assad regime, and is in essence a US national legislation that imposes dire ‘sanction's’ on the Syrian government headed by Bashar Al-Asaad, and any and all entities, companies, and individuals, Syrian and non-Syrian, that support and assist the government, with the intention of punishing for war crimes against the Syrian population. 

Over the years, Lebanon and Syria have developed strong informal economic ties, although formal trade has decreased as political divides over the Assad regime have frozen official relations. According to Al-Modon, the total volume of trade between the two countries amounts to nearly $603 million. It is not uncommon for both countries to have clandestine crossings and unofficial, sometimes illegal, trade through their 400km shared frontiers. Thus, by entangling formal trade, the US sanctions will drive commerce further underground and boost the smuggling of fuel, wheat, and other basic goods, depleting Lebanon’s already squeezed dollar supply. Additionally, in recent years, Lebanon’s single consistent official transaction with the Syrian state has been the purchase of power, up to 250 megawatts of electricity out of the 3,500 megawatts it requires to satisfy the local demand. As it seems, the effect of the Caesar Act will put Lebanon’s electricity in a worsening position consequently.

With that said, trade and electricity are certainly not all that financially ties Lebanon and Syria. In 2011, several Lebanese banks operating in Syria have been detached from their mother branches in Lebanon. However, their Lebanese counterparts continued getting financial contributions from now-Syrian banks. Today, since the Syrian Central Bank is at the top of the hit list of Caesar Act, the direct relation these Syrian banks have with the latter Lebanese banks puts them at risk because of their financial association with them. 

Finally, as stated in the Act itself, private businesses and individuals who have financial investments or connections with public Syrian institutions will also be targeted by the sanctions, and many in Lebanon fit into this specific category.

Like any sovereign state therefore not subject to an external or higher authority, Lebanon acts independently from other states and exercises exclusively all of it powers. According to the principle of sovereignty, each state behaves with the others as it wishes the others to behave with it, thus respecting their sovereignty and refraining from intervening in its affairs. 

In fact, Article 2 (7) of the United Nations Charter states that the UN has no authority to intervene in matters which are within the domestic jurisdiction of any state. However, this non-intervention principle entails several exceptions, all based on the principle of ‘humanitarian intervention’ that aims at protecting Human Rights by providing emergency aids to populations in states of distress. 

Throughout history, some political situations have been disguised as humanitarian situations to justify an intervention, especially when this intervention is not authorized by the Security Council. All interventions with the use of force or through economic coercions, commonly referred to as sanctions, which were not authorized by the UN Security Council are a direct infringement of the UN Charter and are direct violations of binding international law.

 On June 15 2020, Reuters reported that the planned US sanctions will deter investment in Syria and deepen Syria’s isolation from the global financial system. It is crucial to note that these sanctions are occurring against the backdrop of almost a decade of warfare and in the current context of both the country’s currency collapse and its efforts to contain COVID-19. Reuters even acknowledges that civilians might be further harmed by this planned moved by stating that “some western NGOs, while saying Assad’s government deserves to be punished, are wary of any impact on civilians.”

Lebanon, which is greatly tied to Syria, sees its sovereignty violated by the implementation of the Caesar’s Act. As a traditional conduits of goods and finance for Syria, Lebanon will be hit hard as businesses with links to Damascus will have to navigate the new risks, according to Reuters. Additionally, these sanctions make Syria’s reconstruction by the international community practically impossible to pull off unless its government capitulates to the US’ list of demands for ending the war on its political terms.

By targeting private companies involved in Syrian reconstruction, and this means mainly Lebanese companies, the Act is compromising the authority and independence of the Lebanese State. Either way, Lebanon’s economic crisis will be worsened by US sanctions targeting Syria’s government and Lebanese sovereignty will be at stake.