FACTS ON US BUSINESS ACTIVITY IN SYRIA

UNCLAS DAMASCUS 000844 SIPDIS SENSITIVE SIPDIS DEPT PLEASE PASS TO EU MEMBER STATES COLLECTIVE IMMEDIATE NEA/ELA NSC FOR ABRAMS/DORAN/SINGH TREASURY FOR GLASER/LEBENSON EB/ESC/TFS FOR SALOOM E.O. 12958: N/A TAGS: ECON EFIN EINV SY SUBJECT: FACTS ON US BUSINESS ACTIVITY IN SYRIA REF: A. LONDON 1459 ¶B. DAMASCUS 641 ¶C. DAMASCUS 196 ¶1. (SBU) The following information is offered for EU posts, consideration and reference when discussing aligning EU and USG policy vis--vis the SARG (ref A). Two discrepancies between USG and EU economic policy are apparent from Damascus: EU missions continue to promote business investment in Syria, including visits by trade missions from EU memeber states, and development assistance continues to flow from Europe. Though the EIB loans arguably have the highest profile, EU member states also have on-going bilateral development assistance programs with the SARG. This is in contrast to USAID, which closed its mission in Syria in 1983 following Syria's designation as a state sponsor of terrorism. ¶2. (U) Unlike governments of EU countries, the USG does not promote US business activity in Syria. We do, in fact, discourage US companies that consult with us from investing in Syria at this time. In spite of this, the SARG has been using its control of domestic media to imply there is significant new American business interest in Syria. While this is not/not the case, it is part of a larger campaign the Syrian regime has been pursuing to hype foreign direct investment to reassure a worried public and subvert its international political isolation (ref B). ¶3. (U) Though a ban on all US business activity is one of the six options available to President Bush under the Syria Accountability and Lebanese Sovereignty Restoration Act, which he signed into law in May 2004, it has not yet been implemented. In spite of that, most US companies have either divested or are in the process of divesting their business interests in Syria (ref C). We are not aware of any large US companies that are either pursuing existing business enterprises or exploring new opportunities in Syria. The only US companies we are aware of that are still pursuing business in Syria are either small companies privately owned by Syrian-Americans or small independent oil companies. US exports to Syria are banned, with the exception of food and medecine, but Exxon-Mobil and ConocoPhillips both have contracts to import oil from Syria. US imports from Syria did increase by roughly 20 percent last year (to USD 324 million total in imports),which could be largely attributable to the increased price of oil. SECHE