Syria orders freeze of bank accounts linked to former regime

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DAMASCUS (Reuters) – Syria’s central bank has ordered commercial banks to freeze all accounts tied to people and companies linked to the ousted regime of former President Bashar al-Assad, according to a document seen by Reuters and people familiar with the decision.

The circular, issued on Thursday, calls on banks to “freeze all bank accounts of companies and individuals linked to the defunct regime,” and to inform the central bank of the details of all accounts frozen within three working days.

It specifically calls on banks to freeze accounts belonging to the Katerji Group, known for its involvement in the Syrian oil trade. The group was run by brothers Baraa and Hussam Katerji.

Baraa Katerji was killed in a suspected Israeli strike in Syria near the Lebanese border in July. Israel did not comment on the strike.

Hussam Katerji and his businesses are under U.S. sanctions, including for “facilitating petroleum shipments and financing to the Syrian Regime,” according to the U.S. Treasury website.

Reuters could not reach Hussam Katerji for comment.

The Katerjis were part of a small circle of businessmen close to the Assad family who rose to prominence during the Syrian civil war, which began in 2011 after Assad’s government cracked down on popular protests.

Assad was ousted by Islamist rebels on Dec. 8. They have since put in place an interim government and are making efforts to trace financial flows linked to his regime.

One banker, who spoke on condition of anonymity due to the sensitivity of the matter, said the central bank circular could not easily be implemented given that many regime-linked businessmen set up accounts in the names of other people, or used front companies.

The new Syrian administration had already implemented a general freeze on bank accounts after taking power but individuals were able to challenge the decisions and withdraw or transfer some funds.

The new measures are intended to be more stringent and targeted and help authorities gather information on regime-linked finances, said a Syrian official familiar with the matter.

(Reporting by Riham Alkoussa and Timour Azhari Editing by Rod Nickel)