How does a country emerge from years of a corrupted, criminalized, and dysfunctional economy that took root under prolonged sanctions? It is a question sanctions analysts have rarely addressed, but one a growing number of countries now face. The fall of Bashar al-Assad in Syria and the U.S. military operation in January 2026 that removed Nicolás Maduro from power in Venezuela have moved the question to the top of the international agenda. Iran and Cuba may be next.
The answer turns on two sets of choices. The first lies with the post-sanctions state itself: whether its leadership commits to the institutional reforms needed to dismantle entrenched crime and corruption, and whether it draws effectively on the international institutions equipped to help. The second lies with the sanctioning states – and is the question this piece presses: what do they owe, when sanctions are first imposed and war-gamed for impact, to anticipate the transition obstacles their own measures will create?
The difficulty begins well before relief takes hold. As one of us has argued previously in Just Security, sanctioning states have struggled to plan regarding how and when to deliver on their own promises to lift sanctions. There appears to be a blind spot among sanctions imposers regarding how a targeted country transitions to a post-sanctions economy, which faces substantial dislocations, crime and corruption among them, in their domestic economies and their regional and global trade relationships.
As a recent Harvard University study noted, “[s]anctions relief does not automatically unlock capital, restore infrastructure, or generate jobs. It opens a door, but it does not determine who walks through it, how quickly, or under what conditions.” Illustrating this point was the difference between the U.S. and European Union approaches to select areas of sanctions suspension in the first three post-Assad months in Syria. The United States, especially with the repeal of the Caesar Act, took a “wait and see” approach regarding the direction of the new leadership. The EU opted often and early to “act and see,” through sanctions relief, making adjustments as actions and events in Syria unfolded.
Post-sanctions economic recovery requires a roadmap, new partners, and new practices that can displace, prosecute, and deter internal corruption and external illicit networks that flourished under sanctions. It requires leadership that prioritizes three things at once: eliminating fraud in all payment and banking systems, enhancing the Anti-Money Laundering (AML) measures, and combating the financing of terrorism. No new government can get there alone, but too many sanctions imposers fail to proactively assist a former target to achieve these reforms.
A Framework for Financial Integrity After Sanctions
Below, we provide the basic framework for how to set up conditions to uproot entrenched crime and corruption in a post-sanctions economy. Each warrants deeper treatment than we offer here.
(1) Leadership Commitment
National leaders must commit to reforms, integrity, and accountability. Government officials must pledge to be accountable for their actions. In taking ownership of their current economic environment, they must establish clear roles and responsibilities within their governance structure. Tone and integrity at the top are imperative, as is segregation of duties so that all the power is not concentrated in a single or few individuals. Nations should set short-term, medium-term, and long-term goals to attain these standards, while also acknowledging their shortcomings in meeting these benchmarks, recognizing that perfection will not come overnight.
(2) Achievable Goals
Set achievable goals. Countries emerging from sanctions cannot achieve everything all at once. Priority must go to basic financial controls around receipts, remittances, disbursements, record keeping, and verifications of customer relationships and to three threats those controls are designed to address: potential fraud, money laundering, and terrorism financings. The Committee of Sponsoring Organizations of the Treadway Commission’s Internal Control Integrated Framework (COSO) is a widely-adopted standard in designing and evaluating internal controls in both the public and private sectors.
(3) International Standards
Engage with and follow available resources from the Bretton Woods institutions. When establishing goals, nations should follow existing guidance, such as from the International Monetary Fund (IMF) and its resources, including IMF Code of Good Practices on Transparency in Monetary and Financial Policies. Additionally, a focus on and adherence to the Financial Action Task Force (FATF) Recommendations indicates to outside investors and financial institutions that appropriate steps are being taken to combat money laundering, as well as the financing of terrorism and proliferation.
The United Nations Office on Drugs and Crime (UNODC) and the United Nations Development Programme (UNDP) also have a significant role to play. As UNODC explains, it is essential to provide third party administered procurement for public works, through which governments and organizations can ensure transparent bidding and reduce opportunities for corruption. This expertise was extended into combating criminal, drug-based networks in nations throughout sub-Saharan Africa and is applicable to any nation recovering from sanctions.
(4) Needs Assessments
Continually conduct needs assessments enlisting available global expertise. Identify areas where capacity building is needed to promote and sustain solid financial accounting and oversight in accordance with international standards and good practices. This will likely require site visits by experts and interviews with the most relevant public and private sector stakeholders to inform an initial mapping of needs. In many states, this may also entail the development of primarily preventive and detective controls throughout the banking environment to mitigate risks, as well as the development of policies and procedures for general controls over the technology systems on which both depend.
(5) Transparency
Ensure transparency throughout the recovery process. Many around the globe may be hesitant to invest or reinvest in a previously unstable, sanctioned economic environment. To address this concern, government and financial regulators need to have a mechanism to consistently communicate plans and status of actions to the external world. Governing officials, supported by appropriate expertise from outside resources – regulators, consultants, legal firms, auditors, and others – can continue to demonstrate and make publicly available data and practices that were previously falsified or hidden.
(6) Monitoring & Evaluation
Use monitoring and evaluation (M&E) to determine how the new systems are working and then recalibrate when necessary. Internal auditors, working groups, and external consultants should assist with a robust monitoring and evaluation of financial and trade systems on a regular basis. Building local, professional capacity in these techniques and processes is essential. These assessments will yield lessons and should be used to adapt and evolve the existing policies and procedures. Global expertise in M&E can also assist national leadership in making adaptations on a consistent basis as an economy may require. Among these are identifying where threats and vulnerabilities exist within the banking system and anticipating where fraud is most likely to occur.
Syria, Measured Against the Framework
The Syria case illustrates the central challenge highlighted in our framework – that when sanctions relief has occurred leadership in the post-sanctions state must commit and undertake deep institutional reform and accountability. Technical assistance and other forms of capacity building, in addition to sectoral investments, are also vital.
Syria’s post-Assad government has been quite effective thus far in attracting considerable interest in foreign investment, particularly regionally. They have taken part in various investment forums and subsequently signed a substantial number of memoranda of understanding (MoUs) for reconstruction and economic growth in Syria. The majority of these are backed by Saudi Arabia or Qatar.
However, there is concern of lack of adherence to principles of good financial governance around project development, as well as ambiguity around the government priorities related to these projects. This is reflective of perhaps the lack of a broader reconstruction plan and clear messaging around what the government priorities are. It remains to be seen how essential basic public works infrastructure – which are the most urgent – will be funded, as they do not attract the same level of headline international investment opportunities.
This leads to prioritization of the more glamorous investments, rather than what is needed in this phase. Deprioritizing the basic public works projects will inevitably continue the loop of economic hardship that Syrians have endured over the past decades. Consistent messaging from Damascus on realistic prioritization of reconstruction projects is vital.
Syrian leadership must balance the need to keep the global partners energized about their opportunities in Syria, while also being prudent in ensuring that they follow a logical sequence in taking on reconstruction projects. Thus far, public information is scant on the terms of many of these agreements and the plans to implement them. It is imperative that the Syrian government take measures to increase the transparency of the financing of these various large undertakings, subject them to strong internal controls, and provide reviews and audits of financial terms and transactions throughout the process.
Syria’s interactions with international financial norms are showing some signs of progress. Syrian officials did announce their “high-level political commitment” to align with standards promoted by the IMF and FATF. There has been an important breakthrough after the IMF visit to Damascus in February. Although FATF has been unable to conduct a site visit to get a new baseline assessment or verify progress on the ground, a Syrian delegation headed by the Central Bank Governor met in Vienna with the President of FATF in mid-March.
Engagement with other entities such as the UNDP and UNODC has enabled some needs assessments, capacity building, and pilot transparency measures in specific sectors. Members of the Syrian government have had encouraging, positive, and consistent collaboration with IMF staff over the past year – including multiple site visits from the IMF staff to Damascus in June and November 2025 and February 2026. Most recently, the IMF staff visited Damascus from February 15–19, 2026, as part of its intensive program of engagement with Syria. They assessed the economic situation and discussed progress in economic reforms, policy, and capacity building priorities. They noted that for now, a focus should be on empowering the central bank to ensure price and financial stability, ensuring its independence, developing an appropriate monetary policy framework, and conducting a thorough assessment of banks’ financial health.
The government acting on these recommendations will help rebuild public trust in banking and let systems play their essential role in financial intermediation and payment facilitation. They seemed encouraged by their progress to date and plan to continue to work with multilateral, regional, and bilateral donors to support capacity building efforts. Continuing tracks such as this, to ultimately set a pathway to the resumption of Article IV consultations and FATF compliance, is imperative to Syria’s return to the international financial landscape.
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As we have outlined, and illustrated briefly with the evolving case of Syria, building a crime-and-corruption-free economy in a post-sanctions state requires a combination of factors. The foundational component is national leadership pledging and functioning at a high level of integrity, transparency, and adaptability.
Success also rests on the consistent availability of a diverse coalition of private experts, international investors, and global economic institutions committed to building the capacity of government and business actors in the nation. Under the best conditions, national leadership takes advantage of these resources and guidelines – and has timely assistance from the coalition of sanctions imposers – to rebuild integrity in financial governance and regulatory systems in their emerging national economy.
A poignant example – late to arrive, in our view – is the U.S. Treasury’s issuance on May 5, 2026 of General License 58, authorizing U.S. persons to provide services to the government of Venezuela in connection with potential restructuring of its sovereign debt, including the debt of Petróleos de Venezuela (PdVSA). The authorization is exactly the kind of ex ante facilitation we have in mind, i.e. clearing legal space for external financial advisors, attorneys, and creditors to begin the technical work that any post-sanctions recovery requires. That it took the United States more than four months after Maduro’s removal to issue this guidance, and that it remains tightly bound to debt restructuring rather than the broader recovery architecture Venezuela will need, suggests how much further the toolkit for sanctions termination has to develop.
The Syrian case also demonstrates the complexity of securing new investors while developing and sustaining a solid foundation of financial good governance to ensure that the people of Syria are beneficiaries of economic growth and the delivery of public goods and services. Advance planning, undertaken with an understanding of shared responsibility on both the imposers and the targets of sanctions, before sanctions are imposed in the first place, would help to provide a smoother glide path for post-sanctioned countries to follow when (or if) those sanctions are eventually lifted. The lesson to sanctioning nations since January 2025 should be that their lack of a tool kit for sanctions termination handicaps the prospects for sanctions success broadly defined.
Certainly, even the best array of new practices integrated into a post-sanctions environment will not rid the nation of crime and corruption that took root over a decade or more of sanctions. But early, successful action in the areas of practice outlined here is necessary to overcome the over-compliance of investors and traders, as well as the risk-averse behavior of banking and other financial institutions. This, in turn, should prompt private financial actors to find ways to inject resources with confidence and spark new investment to restore the economic functioning of the country.
