Syria’s central bank issues first letter of credit in 14 years

Syria’s central bank has issued its first letter of credit in nearly 14 years, allowing local companies to trade internationally.

The state-run Syrian Petroleum Company used the letter, issued on October 11, to import petroleum products from Aramco Trading, a subsidiary of Saudi Aramco, the state-owned Sana news agency reported.

A letter of credit guarantees payment to the seller through the importer’s bank, reducing risk for both parties.

The transaction marks a return to formal trade finance after years of reliance on informal arrangements and intermediaries in third countries, said Abdul Rahman Mohammed, a professor of finance and banking at the University of Hama.

The European Union and US lifted sanctions on Syria last year, following the ousting of leader Bashar Al Assad at the end of 2024. GCC companies have since announced major investments in the war-torn nation.

Syria’s banking sector reconnected with the international financial system in February after the central bank met US anti-money-laundering and counter-terrorism-financing requirements.

Last month Hamid Saif Alzaabi, president of the Middle East and North Africa Financial Action Task Force, told AGBI that Syria’s return to global finance had drawn renewed international scrutiny of its efforts to combat money laundering and illicit flows.

Further reading:

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• Syria’s financial reopening puts laundering controls to the test