Commercial Bank of Syria Section 311 special measure (2004-present)

The Commercial Bank of Syria Section 311 special measure is a United States financial-network restriction imposed through the USA PATRIOT Act. The Financial Crimes Enforcement Network found the bank to be of primary money-laundering concern in 2004 and imposed the fifth special measure in 2006. The rule remained in the Code of Federal Regulations on 29 July 2026, but FinCEN granted conditional exceptive relief on 23 May 2025.

Finding and final rule

FinCEN's May 2004 action combined a statutory finding with a notice of proposed rulemaking. It alleged money-laundering vulnerabilities and illicit-finance connections involving the state-owned Commercial Bank of Syria and proposed restrictions covering its subsidiary, the Syrian Lebanese Commercial Bank. The allegations were Treasury findings, not judicial determinations.

The operative restriction came later. On 15 March 2006, FinCEN issued a final rule imposing the fifth special measure, now codified at 31 CFR 1010.653. Covered United States financial institutions could not open or maintain correspondent or payable-through accounts for the 2 banks. They also had to apply due diligence designed to prevent foreign correspondent accounts from being used indirectly to process prohibited transactions.

This structure restricted a specific access channel. It did not prohibit every dollar transaction worldwide or legally terminate every possible clearing, messaging or currency-conversion relationship. The banks could continue activity through channels outside the United States rule, subject to other applicable laws and private compliance decisions.

Relief and current position

FinCEN's 23 May 2025 exceptive relief allowed covered institutions to open and maintain correspondent accounts for the Commercial Bank of Syria and its subsidiary under stated conditions. Exceptive relief does not repeal the finding or remove 31 CFR 1010.653 from the Code of Federal Regulations. It changes what regulated institutions may do while the underlying rule remains codified.

The FinCEN action is legally distinct from sanctions administered by the Office of Foreign Assets Control. Treasury coordinated public announcements on 23 May 2025, but Section 311 and OFAC restrictions arise under different statutes and bind different conduct. OFAC revoked the Syrian Sanctions Regulations effective 1 July 2025 while retaining other authorities and designated-person restrictions. That revocation did not itself repeal the Section 311 rule.

Assessment

This is a main-sequence case of direct financial statecraft. A public authority used correspondent-account regulation and indirect-use due diligence to protect the United States financial system and restrict a foreign state-owned bank's network access. The legal mechanism and regulated intermediaries are established.

Its broader effect is less certain. The source record does not quantify lost correspondent relationships, rerouting costs, transaction volumes, changes in bank conduct or Syrian policy concessions. Continued operation outside the restricted channel does not prove the measure ineffective, while the rule's existence does not prove financial isolation or compellence. The 2025 relief further requires the case to be read as a changing control architecture rather than a closed 2004-2006 episode.

See also

USA PATRIOT Act Section 311 (2001) · Financial Crimes Enforcement Network (FinCEN) · Correspondent-account closure · Compliance cascade · Syria sanctions, the Caesar Act and United States relief (2011-present)

Sources

1. Financial Crimes Enforcement Network, Imposition of Special Measure Against Commercial Bank of Syria, Including Its Subsidiary Syrian Lebanese Commercial Bank, as a Financial Institution of Primary Money Laundering Concern, notice of proposed rulemaking and finding, May 2004.
2. Financial Crimes Enforcement Network, Final Rule Imposing a Special Measure Against Commercial Bank of Syria, 15 March 2006.
3. United States Government Publishing Office, Federal Register, volume 71, 15 March 2006.
4. Electronic Code of Federal Regulations, 31 CFR 1010.653, Special measures against Commercial Bank of Syria.
5. Financial Crimes Enforcement Network, Section 311 Special Measures.
6. Financial Crimes Enforcement Network, Commercial Bank of Syria Case Page.
7. Financial Crimes Enforcement Network, Exceptive Relief from the Special Measure Against Commercial Bank of Syria, 23 May 2025.
8. United States Department of the Treasury, 'Treasury Issues Immediate Sanctions Relief for Syria', 23 May 2025.
9. Office of Foreign Assets Control, 'Syria Sanctions Program Revoked', 30 June 2025.
10. United States Department of the Treasury, 'Treasury Implements the President's Termination of Syria Sanctions', 30 June 2025.
11. United States Government Accountability Office, USA PATRIOT Act: Better Interagency Coordination and Implementing Guidance for Section 311 Could Improve U.S. Anti-Money Laundering Efforts, GAO-08-1058 (2008).
12. Joshua P. Zoffer, 'The Dollar and the United States' Exorbitant Power to Sanction', AJIL Unbound 113 (2019): 152-156.