Constitutional Committee Meetings Hinge on Pandemic as Damascus Warns of ‘Traps’

Bashar Assad delivers a speech before the People's Council on Wednesday. (AP)
Bashar Assad delivers a speech before the People's Council on Wednesday. (AP)
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Constitutional Committee Meetings Hinge on Pandemic as Damascus Warns of ‘Traps’

Bashar Assad delivers a speech before the People's Council on Wednesday. (AP)
Bashar Assad delivers a speech before the People's Council on Wednesday. (AP)

The meetings of the Syrian Constitutional Committee, with the participation of the government, opposition negotiations committee and civil society, are expected to be held in Geneva on August 24, if the coronavirus pandemic allows it. The meetings will be a chance to test the latest positions of the concerned parties after a long absence and after the announcement of the Astana course “guarantors” that they are the “real sponsors” of the constitutional process in Syria. Another significant development, was president Bashar Assad’s labeling as “idle talk” Washington and Ankara’s “meddling” in political initiatives.

United Nations envoy Geir Pedersen is still cautious about hosting the Constitutional Committee meetings, leaving his options open until he has guarantees that they can be held and until he senses that Damascus and the opposition are ready to engage in “constructive” dialogue to amend the constitution through the Syrians and the Syrian leadership. Moscow, Ankara and Tehran, on the other hand, have decided to dispatch the deputies of their foreign ministers to hold a tripartite meeting for Syrian “guarantors/players” on the eve of the Syrian “rivals” meeting.

American transitional phase
This is not the first time that three countries attempt to undermine the achievements of the constitutional path. The foreign ministers of Russia, Turkey and Iran had previously sent their foreign ministers to Geneva to present their vision of “Syrian constitutional reform”. United Nations Secretary-General Antonio Guterres had put a stop to such moves. Now, however, the scene is different. The United States is preoccupied with other priorities: the pursuit and implementation of the Caesar Act that it is using to apply “maximum pressure” to punish Damascus and pressure Moscow. It is also busy with President Donald Trump nearing the end of his term.

In theory, the representatives of the Syrian government, opposition and civil society are expected to meet to discuss constitutional reform. These meetings had come to a halt in the past due to disputes over the agenda. The government wants to begin with reaching an agreement on “national foundations” that are linked to rejecting “occupations” and terrorism. The opposition wants to kick off talks by discussing the constitution and its principles. Fortunately, Pedersen was able to reach an understanding on the agenda thanks to Moscow’s intervention.

The agenda will now discuss the basic foundations for the procedures of the Constitutional Committee in order to hold discussions on national foundations and principles. The great vagueness of this agenda will be put to the test in Geneva.

Russia’s pledge to convince Damascus to keep its delegation in Geneva for more than two weeks for serious talks will also be put to the test. This issue was the main focus of discussions the Russian president's special envoy, Alexander Lavrentiev, held during his latest visit to Damascus.

‘Idle talk and traps’
Ahead of the talks, Assad set the political standard by speaking about “attempts to topple the nation, overthrow sovereignty, divide the people and deal a blow to constitutional institutions.” Addressing the People's Council (parliament), he said these attempts will be “thwarted by the determination of the people to commit to constitutional deadlines.” Assad also cited the people’s participation in recent parliamentary elections as a form of defense of the constitution. He was referring to the 2012 constitution, which the government is clinging on to. The most it will accept is “discussing” the constitution, not its “amendment” or “drafting of a new one.”

Assad dedicated his speech to the internal Syrian situation, such as corruption and American sanctions. At the end, he addressed the political situation, saying: “Despite the honest efforts of our friends in Iraq and Russia” in pushing forward the Constitutional Committee meetings, “they have turned into idle political talk due to the meddling of the US and its agent, Turkey, and their representatives at the dialogue.”

“We still believe in the need to support political initiatives, even though we know that the other side is bound by money and the orders of their real masters outside the nation,” Assad continued. “Political initiatives are aimed at luring us into traps they have set up to achieve what they could not through terrorism. In their dreams.”

Washington is forging ahead with its implementation of the Caesar Act whereby it is expected to release a new batch of sanctions. Its first batch, released in June, targeted 39 individuals and entities, including Assad and his wife Asma. In July, 14 more targets were added, including Assad’s son, Hafez, 18.

During his speech, Assad also referred to his cousin, Rami Makhlouf, the business tycoon who has dramatically fallen from grace with the regime. “The fight against corruption has intensified in recent years,” said Assad. “We are continuing in restoring looted public funds through legal means and institutions. No one is above the law. Reform is not about revenge or settling scores.”

Through Syria’s 10-year war, Makhlouf had helped Assad evade Western sanctions on fuel and other goods vital to his military campaign. He was part of the president’s inner circle, accused by the United States of exploiting his proximity to power to enrich himself “at the expense of ordinary Syrians.” His business empire spanned telecoms, energy, real estate and hotels, looming large over Syria’s economy.

But now the two men are now locked in a battle over money. Security forces had recently raided Makhlouf’s telecoms company, Syriatel, in a tax dispute and detained dozens of employees for questioning.

The rift between Assad and Makhlouf burst into public view on April 30, when Makhlouf posted the first of three videos to social media. In the videos, he said the government had asked him to step down from his companies, including Syriatel.

On May 19, 2020, the finance ministry froze the assets of Makhlouf, his wife and an unspecified number of his at least two children, according to a document reviewed by Reuters. It also ordered that overseas assets should be seized “to guarantee payment of dues to the telecom regulatory authority.” The government has said Syriatel owes the telecom regulator 134 billion Syrian pounds ($60 million) relating to the terms of the company’s license. Makhlouf insisted in one of his social media posts that he stands ready to pay.

A separate order banned Makhlouf from obtaining government contracts for five years.



Iran's Revolutionary Guards Extend Control over Tehran's Oil Exports

Iranians drive as smog obscures the skyline in Tehran, Iran, 18 December 2024. EPA/ABEDIN TAHERKENAREH
Iranians drive as smog obscures the skyline in Tehran, Iran, 18 December 2024. EPA/ABEDIN TAHERKENAREH
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Iran's Revolutionary Guards Extend Control over Tehran's Oil Exports

Iranians drive as smog obscures the skyline in Tehran, Iran, 18 December 2024. EPA/ABEDIN TAHERKENAREH
Iranians drive as smog obscures the skyline in Tehran, Iran, 18 December 2024. EPA/ABEDIN TAHERKENAREH

Iran's Revolutionary Guards have tightened their grip on the country's oil industry and control up to half the exports that generate most of Tehran's revenue and fund its proxies across the Middle East, according to Western officials, security sources and Iranian insiders.

All aspects of the oil business have come under the growing influence of the Guards, from the shadow fleet of tankers that secretively ship sanctioned crude, to logistics and the front companies selling the oil, mostly to China, according to more than a dozen people interviewed by Reuters.
The extent of the Iranian Revolutionary Guard Corps' (IRGC) control over oil exports has not previously been reported.

Despite tough Western sanctions designed to choke Iran's energy industry, reimposed by former US President Donald Trump in 2018, Iran generates more than $50 billion a year in oil revenue, by far its largest source of foreign currency and its principal connection to the global economy.

Six specialists - Western officials and security experts as well as Iranian and trading sources - said the Guards control up to 50% of Iran's oil exports, a sharp increase from about 20% three years ago. The sources declined to be identified due to the sensitivity of the matter.

Three of the estimates were based on intelligence documents about Iranian shipping while others derived their figures from monitoring shipping activity by tankers and companies linked to the IRGC. Reuters was unable to determine the exact extent of the IRGC's control.

The IRGC's growing domination of the oil industry adds to its influence in all areas of Iran's economy and also makes it harder for Western sanctions to hit home - given the Guards are already designated as a terrorist organization by Washington.

Trump's return to the White House in January, however, could mean tougher enforcement of sanctions on Iran's oil industry. The country's oil minister said Tehran is putting measures in place to deal with any restrictions, without giving details.

As part of their expansion in the industry, the Guards have muscled in on the territory of state institutions such as the National Iranian Oil Company (NIOC) and its NICO oil trading subsidiary, according to four of the sources.

When sanctions hit Iran's oil exports years ago, the people running NIOC and the wider industry were specialized in oil rather than how to evade sanctions, added Richard Nephew, a former deputy special envoy for Iran at the US State Department.

"The IRGC guys were much, much better at smuggling, just terrible at oil field management, so they began to get a larger control of oil exports," said Nephew, who is now a researcher at Columbia University.
The IRGC, NIOC, NICO and Iran's foreign ministry did not respond to requests for comment.
RISK APPETITE
The IRGC is a powerful political, military and economic force with close ties to Supreme Leader Ali Khamenei.
The Guards exert influence in the Middle East through their overseas operations arm, the Quds Force, by providing money, weapons, technology and training to allies Hezbollah in Lebanon, Hamas in Gaza, Yemen's Houthis and militias in Iraq.
While Israel has killed a number of senior IRGC commanders over the past year, the oil specialists in its ranks have been able to continue their operations, two Western and two Iranian sources said.
The Iranian government began allotting oil, instead of cash, to the IRGC and Quds Force around 2013, according to Nephew.
The government was under budgetary pressure then because it was struggling to export oil due to Western sanctions imposed over Iran's nuclear program.
The IRGC proved adept at finding ways to sell oil even under sanctions pressure, said Nephew, who was actively involved in tracking Iranian oil activities then.
Iranian oil revenues hit $53 billion in 2023 compared with $54 billion in 2022, $37 billion in 2021 and $16 billion in 2020, according to estimates from the US government's Energy Information Administration.
This year, Tehran's oil output has topped 3.3 million barrels per day, the highest since 2018, according to OPEC figures, despite the Western sanctions.
China is Iran's biggest buyer of oil, with most going to independent refineries, and the IRGC has created front companies to facilitate trade with buyers there, all the sources said.
Oil export revenues are split roughly evenly between the IRGC and NICO, said one source involved in Iranian oil sales to China. The IRGC sells oil at a $1-$2 barrel discount to prices offered by NICO because buyers take a bigger risk buying from the Guards, the person said.
"It depends on a buyer's risk appetite, the higher ones will go for the IRGC, which the US designates as a terrorist group."
Two Western sources estimated that the IRGC offered an even bigger discount, saying it was $5 per barrel on average but could be as much as $8.
The oil is allocated directly by the government to the IRGC and Quds Force. It's then up to them to market and ship the oil - and work out a mechanism for disbursing the revenue, according to the sources and intelligence documents seen by Reuters.
NIOC gets a separate allocation.
CHINESE FRONT
One of the front companies used is China-based Haokun. Operated by former Chinese military officials, it remains an active conduit for IRGC oil sales into China, despite Washington hitting it with sanctions in 2022, two of the sources said.
The US Treasury said China Haokun Energy had bought millions of barrels of oil from the IRGC-Quds Force and was sanctioned for having "materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, the IRGC-QF".
In one oil transaction dated March 16, 2021 involving Haokun and parties including Turkish company Baslam Nakliyat - which is under US sanctions for its trading links to the IRGC - a payment was processed via US bank JP Morgan and Turkish lender Vakif Katilim, according to the intelligence documents.
The transaction took place before the companies were sanctioned. Reuters has no indication JP Morgan or Vakif Katilim were aware of the Iranian connection - highlighting the risks of companies getting inadvertently caught up in the shadow trade.
JP Morgan declined to comment. Vakif Katilim said in a statement: "Our bank performs its activities within the framework of national and international banking rules."
Haokun declined to comment. Baslam did not respond to a request for comment.
'GHOST FLEET'
Quds Force commander Qassem Soleimani, who was killed in a US strike in Baghdad in 2020, had set up a clandestine headquarters and inaugurated that year for the unit's oil smuggling activities, initially staffed by former oil minister Rostam Ghasemi, according to the intelligence documents.
Reuters could not determine where all the oil money funneled through the IRGC goes. The IRGC headquarters and day-to-day operations has an annual budget of around $1 billion, according to assessments from two security sources tracking IRGC activities.
They estimated that the IRGC budget for Hezbollah was another $700 million a year.
"Exact figures remain undisclosed, as Hezbollah conceals the funds it receives. However, estimates are that its annual budget is approximately $700 million to $1 billion. Around 70%-80% of this funding comes directly from Iran," Shlomit Wagman, former director general of Israel’s Money Laundering and Terrorism Financing Prohibition Authority, said separately.
Hezbollah did not respond to a request for comment.
The former Secretary General of Hezbollah, Hassan Nasrallah, who was killed in an Israeli airstrike, said Iran provided the group's budget, including for salaries and weapons.
Iran's main tanker operator NITC, which previously played a key role in exports, also now provides services to the IRGC.
It executes ship-to-ship transfers of Iranian oil onto vessels operated by the IRGC to ship crude into China, according to sources and ship-tracking data. Such transfers are common practice to help disguise the origin of the oil tankers carry.
NITC did not respond to a request for comment.
In August, Israel's National Bureau for Counter Terror Financing, part of the country's defense ministry, imposed sanctions on 18 tankers it said were involved in transporting oil belonging to the Quds Force.
In October, the US Treasury slapped sanctions on 17 separate tankers it said formed part of Iran's "ghost fleet", outside of NITC vessels. It followed up with sanctions on a further 18 tankers on Dec. 3.