Syria achieves very low overall compliance with international standards and codes, with a score of 5 out of 100 in our Standards Compliance Index. Syria's regulatory environment and compliance with international standards remain extremely weak. Eight out of twelve standards are at an "insufficient information" level, indicating a serious lack of transparency. In three other areas -- data dissemination, banking supervision, and insolvency framework -- Syria is non-compliant. Corruption is endemic. Although a written bankruptcy law exists, it is not applied fairly. The financial sector is very underdeveloped, with a small number of mostly state-controlled banks. There is a complete absence of capital markets, although a law was promulgated on June 5, 2005 establishing a stock market in Syria. As of 2005, Syria had a law that criminalized drugs and money laundering. However, it did not have any regulations to meet other requirements. A 2005 decree opened the insurance market to the private sector, but as of February 2005 there was no regulatory framework.

Macroeconomic Policy and Data Transparency

Syria is not a subscriber to the Special Data Dissemination Standard (SDDS) or the General Data Dissemination System (GDDS). According to the IMF's 2006 Article IV Consultation report, the macroeconomic statistics are affected by weaknesses in coverage, consistency, periodicity, and timeliness, which hamper the IMF's ability to conduct economic analysis and effective surveillance. Syrian representatives have expressed an intention to address the need for statistical improvement. They have agreed that Syria's participation in the General Data Dissemination System (GDDS) would provide a framework for statistical development. To this end, compilers from the Ministry of Finance, Central Bank of Syria (CBS), and the Central Bureau of Statistics participated in a GDDS Workshop in Abu Dhabi during February 27-March 9, 2005 and prepared preliminary metadata for all macroeconomic sectors. More »

According to the International Monetary Fund's (IMF) 2005 Article IV consultation report, the Syrian authorities' intention to strengthen the role of the Central Bank of Syria in formulating and implementing monetary and foreign exchange policies and to reorient the activities of the Commercial Bank of Syria toward traditional commercial banking is a move in the right direction. However, there is no publicly available information as to Syria's adherence to the IMF's Code of Good Practices on Transparency in Monetary Policies. More »

The 2006 Article IV consultations between the International Monetary Fund (IMF) and Syria noted that Syria's government finance statistics (GFS) suffer from major deficiencies with respect to definitions, coverage, classification, methodology, accuracy, reliability, and timeliness that generate severe inconsistencies with monetary and balance of payments statistics. Furthermore, although the short-term outlook and positive supply response are encouraging, formidable challenges remain. The surge in international oil prices has provided a short-term windfall, but will worsen the medium-term prospects when Syria becomes a net oil importer in the next 3-4 years. Greater vigilance is, therefore, needed in pursuing fiscal consolidation within a transparent policy framework aiming at a steady improvement in the non-oil budget balance. However, there is no publicly available information as to Syria's adherence to the International Monetary Fund's (IMF's) Code of Good Practices on Fiscal Transparency. More »

Institutional and market infrastructure

According to the World Bank, Syria does not have a rehabilitation procedure and has no reorganization procedure at all. Although an official bankruptcy law exists, it is not applied fairly because a creditor's ability to salvage any investment is contingent on the amount of influence they can exert and not on the letter of the law. Monetary judgments, if granted, are made in local currency and cannot be converted to hard currency. More »

There is no publicly available information as to Syria's compliance with the International Financial Reporting Standards (IFRSs) promulgated by the International Accounting Standards Board (IASB). More »

There is a complete absence of a capital markets in Syria. The Syrian regulatory system is not transparent on any level. As described by local private business leaders, corruption is endemic at nearly all levels of government. The Government is presently trying to develop a capital market in the country in order to encourage private investment. Syrian authorities have announced that the country's first stock exchange will be opened in Damascus some time in 2007. The legislative framework for the securities and stock markets sector was prepared in accordance with international standards and principles, with Syria also being able to benefit from the experiences of other Arab countries, according to the Finance Minister. However, there is no publicly available information as to Syria's adherence to the Organization for Economic Cooperation and Development's (OECD) Principles of Corporate Governance. More »

There is no publicly available information as to Syria's compliance with the International Standards on Auditing (ISAs) promulgated by the International Federation of Accountants (IFAC). More »

According to a 2006 U.S. Department of State (DoS) report, while Syria has made strides throughout 2005 in developing Anti Money Laundering /Combating the Financing of Terrorism (AML/CFT) regulations that govern its formal financial sector, non-bank financial institutions and the unregulated black market remain very vulnerable to money laundering and terrorist financiers. In addition, the General Directorate of Customs, the Central Bank and the judicial system in particular lack the resources to effectively implement AML/CFT legislation. The Syrian Arab Republic Government (SARG) passed Decree 59 in September 2003 to criminalize money laundering and create an Anti-Money Laundering Commission (the Commission), which was established in May 2004. In response to international pressure to improve its AML/CFT regulations, the SARG passed Decree 33 in May 2005, which strengthens the Commission and lays the foundation for a functioning Financial Intelligence Unit (FIU). Under Decree 33, all banks and non-financial institutions are required to file Suspicious Activity Reports (SARs) with the Commission, which is acting as the FIU, for all transactions over $10,000, as well as all suspicious transactions regardless of amount. The chairmen of Syria's private banks report that they employ internationally recognized "know your customer" (KYC) procedures to screen transactions and employ their own investigators to check suspicious accounts. However, according to the 2006 U.S. DoS report, SARG lacks the political will to punish terrorist financing or to classify what it sees as legitimate resistance groups as terrorist organizations. Furthermore, corruption at the highest levels of government and business may be the biggest obstacle to developing a comprehensive and effective AML/CFT regime. More »

According to a 2004 International Monetary Fund (IMF) report, cash is the principal means of payment in Syria's underdeveloped payment system. An HSBC report indicates that Syria is largely a cash-based society. Credit transfers are used only rarely, while direct debits are not offered. Checks (including certified checks for large amounts) are more widespread. Card usage is growing but remains very limited. International cards are only accepted in major hotels and tourist outlets. Clearing of payment instruments is mainly manual and bilateral. There is no publicly available information as to Syria's compliance with the Core Principles for Systematically Important Payment Systems (CPSIPS) developed by the Bank for International Settlements (BIS). More »

Financial Regulation and Supervision

According to a 2004 report by the International Monetary Fund (IMF), banking supervision and regulation is inadequate in Syria. The Central Bank of Syria (CBS) is not independent and there is no information disseminated on the CBS website. CBS is a public sector institution which has operated within government guidelines since 1956. The banking scene is dominated by state-owned domestic banks. The existing public banks remain inefficient and highly regulated, and focus almost exclusively on financing public enterprises. In its 2006 Article IV Consultation report, the IMF notes that the Syrian authorities indicated confidence that adequate banking supervision capacity is being built up, due to the technical assistance provided by the IMF. With rapid credit growth in the economy, there is a need to strengthen bank supervision and adopt a prudent licensing policy, and to restructure state banks. More »

There is a complete absence of capital markets in Syria. The Syrian regulatory system is not transparent on any level. As described by local private business leaders, corruption is endemic at nearly all levels of government. The Government is presently trying to develop a capital market in the country in order to encourage private investment. In June 2005, President Bashar al-Assad promulgated a law that laid out the broad details of establishing a stock market. Under the law, the exchange is to be overseen by the Capital Markets Authority, which in turn would be answerable to the office of the prime minister. At the time when the law was given presidential approval, Syrian officials said that the exchange would be up and running by 2006, though this has been put back until 2007. According to the Syrian Finance minister, the legislative framework for the securities and stock markets sector was prepared in accordance with international standards and principles, with Syria also being able to benefit from the experiences of other Arab countries. However, there is no publicly available information as to Syria's compliance with the International Organization of Securities Commissions' (IOSCO) Objectives and Principles of Effective Securities Regulation. More »

Prior to 2005, the insurance industry was entirely government-based, with a single state company - the Syrian Insurance Company - as the monopoly provider of insurance. Decree 43 was issued in May 2005 opening the insurance market to the private sector. A regulatory agency - the Syrian Insurance Supervisory Commission - was established in September 2003, but as of October 2006 there was no regulatory framework. There is no further publicly available information as to Syria's adherence to the Insurance Core Principles (ICPs) promulgated by International Association of Insurance Supervisors (IAIS) in 2003. More »

Legend:

Credit Ratings

Moody's Not rated

Fitch Not rated

Standard & Poor's Not rated

Macroeconomic Data

2007 GDP (Current Prices): 37.8 billion USD (IMF)

2007 GDP (Per Capita): 1,946 USD (IMF)

2008 GDP (Growth Forecast): 4% (IMF)

2008 Inflation (CPI): 7% (IMF)

2007 Unemployment: 10% (CIA)

2006 Foreign Direct Investment

FDI (Inward): 0.6 billion USD (UNCTAD)

FDI (Outward): 0.1 billion USD (UNCTAD)

2006 Official Development Assistance

ODA (Received): 27 million USD (OECD)

ODA (Disbursed): N/A million USD (OECD)