Last week, a statement from Esmaeil Baghaei, the spokesperson for the Iranian Foreign Ministry, ignited significant speculation and discussion within diplomatic circles regarding Tehran’s financial obligations to Syria.

Baghaei stated that “the new Syrian government will take on all of Syria’s financial responsibilities to Iran,” referencing the principle of state succession following the ousting of Bashar al Assad, a long-time ally of Tehran. This remark raised questions about the future dynamics of Iran’s relationship with Syria’s interim government.

In conjunction with his comments about the potential reopening of Iran’s embassy in Syria once “the necessary conditions are met,” analysts are attempting to determine whether Iran’s statements indicate a forthcoming demand for financial restitution or a strategic effort to sway the new administration in Damascus.

Iran asserts that it has invested a substantial amount over the past 12 years to support the previous regime of Bashar al Assad, with some Iranian officials estimating the total to exceed $30 billion.

However, Baghaei refuted these assertions, claiming that “the figures are… indeed exaggerated.”

Similar demands for reparations have been voiced by Iranian officials previously, particularly in 2020, when former reformist lawmaker Heshmatollah Falahatpisheh insisted that Syria should repay Tehran for the billions spent during the conflict, stressing that the funds originated from public resources and should be returned.

Bahram Parsaei, a former member of parliament, expressed similar concerns in a social media update. On December 7, just a day before opposition forces entered Damascus, he questioned, “What will happen to this substantial amount?”

While some interpret Tehran’s assertions as a valid request for compensation, others perceive them as a strategy to compel the emerging interim government to negotiate terms that align with Iranian interests prior to the establishment of formal diplomatic relations.

Omair Anas, an assistant professor of international relations at Ankara Yildirim Beyazit University, stated, “It is clear that the new Syrian government will need to assume responsibility for all obligations left by the previous Assad administration.”

He further explained that insisting on these payments before the transition is fully realized seems to convey disapproval of the circumstances surrounding Assad’s removal. Anas indicated that Iran is likely to set new repayment conditions once it receives positive signals from the interim government.

He believes that Iran’s demands are more of a communication to the interim government rather than a sincere expectation for immediate payment. Nonetheless, he also identifies a potential for Iran to modify its strategy.

By prioritizing “reconciliation and collaboration over financial demands,” Tehran has the potential to redefine its narrative and cultivate strategic relations with Syria that transcend sectarian divides.

He emphasizes that “a non-sectarian bilateral partnership” could enable both Iran and Syria to tackle shared challenges, including the reconstruction of Syria, safeguarding Shia minorities, and countering Israeli expansionism.

Is it possible for Syria’s interim government to make counterclaims against Iran?

In this context, Abolfazl Zohrevand, a member of the National Security and Foreign Policy Commission in the Iranian Parliament, has characterized Iran’s investments in Syria as a “strategic necessity.”

However, Anas warns that this perspective may not resonate with the new administration in Damascus, which has faced years of conflict with Iranian-backed militias that supported the Assad regime.

“The new Syrian government has a strong aversion to Iran,” he stated.

He proposes that Syria’s interim government might consider holding Iran accountable for its actions against the Syrian populace.

“I believe Iran is justified in demanding $30 billion from the new Syrian government. Conversely, the new Syrian government should seek at least $300 billion from Iran for the devastation caused to Syrian infrastructure by Iranian-backed militias,” he contended.

This confrontational approach, he cautioned, could lead to legal disputes if trials against Assad and his associates take place in Syrian courts. “Iran needs to act swiftly to find common ground,” stated Anas, highlighting the importance of diplomatic efforts to prevent a drawn-out conflict.

Iran’s substantial investment in the Assad regime

Iran’s financial support for Syria under the Assad administration has been diverse, including direct financial aid, oil deliveries, military assistance, and infrastructure development. Leaked documents from Iran’s Foreign Ministry disclosed that from 2012 to 2021, Iran supplied Syria with around $11 billion in oil, which helped the Assad government maintain its economy during an extended conflict.

These documents, released last year following a cyberattack by the hacktivist group ‘Uprising till Overthrow,’ associated with the Albania-based opposition group Mujahideen-e Khalq (MEK), also revealed that Tehran extended military and financial backing to Syria.

While the precise amounts are debated, this support is said to have encompassed cash transfers and logistical aid provided by Iran’s Islamic Revolutionary Guard Corps (IRGC) and its elite Quds Force.

Additionally, Iran’s financial contributions included long-term agreements, such as a significant deal established in January 2019 during the presidency of Hassan Rouhani.

This agreement established Syria’s financial obligations to Iran and included measures to safeguard Tehran’s presence in Syria during potential political turmoil, such as an assassination or the removal of Assad, a scenario that has now materialized.

Leaked documents indicate a growing urgency in Tehran to recover these investments, with Supreme Leader Ali Khamenei voicing concerns about the security of these financial commitments, likening the situation to Iran’s reduced influence in Bosnia and Herzegovina, despite its significant past investments there.

Iran’s financial assistance was also intended to gain control over vital Syrian industries as a form of compensation for its support. Tehran aimed to acquire interests in critical sectors, including oil fields, mining operations, power generation, and port facilities.

Nevertheless, these assets necessitated substantial investment for development—resources that Iran currently lacks due to its own economic difficulties, which have been worsened by international sanctions. Despite a notable visit by then-Iranian President Ebrahim Raisi to Damascus in May 2023, no definitive agreements were established to affirm Iran’s claims.

Legal frameworks and diplomatic hurdles

Legally, Iran’s financial claims are based on what Anas referred to as “legally justifiable payments of bilateral trade.”

However, he pointed out that the prevailing political instability and the interim government’s absence of UN recognition render these claims more of a political assertion than a tangible demand.

International avenues for addressing such reparation claims—like arbitration through the International Court of Justice (ICJ) or bilateral discussions—are unlikely to be effective in this instance.

Iran’s prolonged sanctions and its fraught interactions with Western nations introduce additional complications. At the same time, the interim government’s unstable position internationally diminishes the likelihood of achieving legal remedies.

Anas remarked, “I believe Iran’s financial claims lack seriousness,” suggesting that these demands reflect temporary frustrations rather than a sustainable policy goal.

“In this period of extraordinary political turmoil, transition, and uncertainty, Iran’s claims seem to serve more as a political and diplomatic assertion than a legitimate request for compensation.”