Syria’s al-Sharaa seeks return of funds allegedly held in Moscow: Report

For years, soldiers from Russia’s Hmeimim Air Base in Syria roamed freely through coastal cities. War planes flew from the complex to bombard opposition forces fighting Bashar al-Assad’s repressive regime.

No longer. With al-Assad gone, at both Hmeimim and at Russia’s Soviet-era Tartous Naval Base 60 km (37 miles) south, small groups of former opposition forces guard the entrances, their “Hayat Tahrir al-Sham” (HTS) group now in control of the country.

The khaki-uniformed guards escort any Russian convoys that venture out, they told Reuters reporters visiting the area last week.

“They have to notify us before they leave,” one of the guards said, declining to speak on record.

The future of the bases, which are integral to Russia’s military reach in the Middle East and Africa, is in the hands of Syria’s President Ahmed al-Sharaa.

He wants to renegotiate the generous al-Assad-era 49-year lease for Tartous and an indefinite lease for Hmeimim to secure better terms, but doesn’t appear to want Moscow shut out altogether.

Instead, it appears the bases may stay in exchange for diplomatic backing and financial compensation from Russia, deeply involved in Syria’s economy and defense for seven decades before it joined the civil war in 2015 and wrought devastation that helped keep al-Assad in power for years.

Al-Assad fell in December, fleeing to Russia through Hmeimim. The new Syrian leadership – once the target of relentless Russian airstrikes – is now engaged with Moscow at the negotiating table.

For this story, Reuters spoke to eight Syrian, Russian and diplomatic sources who gave previously unreported details from the first high-level meeting between al-Sharaa and an envoy sent by President Vladimir Putin, including demands related to billions of dollars of debt, the future of al-Assad, and the repatriation of Syrian money alleged to be in Russia.

Like others in the story, the sources requested anonymity to speak about sensitive matters.

Putting enmity aside has benefits for both parties. Despite the EU and the US easing some sanctions on Syria, the remaining restrictions make it hard to do business with the war-shattered and impoverished country of 23 million.

A restoration of Russia’s traditional supplies of weapons, fuel and wheat could be a life-line. As such, the country’s leaders are willing “to make peace, even with their former enemies,” one Damascus-based diplomat told Reuters.

“Moscow still has something to offer for Syria,” and is too powerful, too entrenched to ignore, said Anna Borshchevskaya at The Washington Institute.

“Russia simply needs a government in Damascus that would ensure its interests, and it would be willing to make a deal with that government,” she said. One UN aid source said that Russia has not exported grain to Syria under the new administration.

US President Donald Trump has said little about Syria since taking office, but he has sought to repair US relations with Moscow. A US State Department spokesperson said with al-Assad gone there was an opportunity for Syria “to no longer be dominated and destabilized by Iranian or Russian influence.”

US ally Israel, however, wants Russia to stay as a bulwark against the Turkish influence, Reuters reported on Friday.

At the January 29 meeting in Damascus, al-Sharaa sought the cancellation of loans contracted with Russia under al-Assad, two of the sources told Reuters. Syria, which was largely free of foreign debt before the war, currently has $20 billion-$23 billion in external obligations, Finance Minister Mohammad Abazid said last month, without specifying how much was owed to Russia.

During the three-hour encounter with Russian Deputy Foreign Minister Mikhail Bogdanov, Syrian officials raised another key issue, the return of al-Assad to Syria, but only in broad terms, suggesting it was not a major obstacle to rebuilding ties, one of the sources said. Russia will not agree to extradite al-Assad, and had not been asked to do so, a senior Russian source said.

Al-Sharaa also urged the repatriation of Syrian funds his government believes were deposited by al-Assad in Moscow, but the Russian delegation, led by Deputy Foreign Minister Mikhail Bogdanov, denied such funds existed, according to a Syria-based diplomat familiar with the talks.

Al-Sharaa’s office and the White House’s National Security Council did not respond to requests for comment.

In a statement issued after the meeting, Syria’s government said al-Sharaa stressed that new relations need to address past mistakes and demanded compensation for the destruction Russia caused. The meeting went relatively smoothly, all the sources said. A phone call between al-Sharaa and Russian President Vladimir Putin two weeks ago was described as constructive by the Kremlin.

Asked by Reuters on Tuesday whether talks between Moscow and Damascus on the fate of Russia’s military bases were progressing, Kremlin spokesman Dmitry Peskov said: “We are continuing our contacts with the Syrian authorities.”

“So, well, let’s just say that the working process is underway,” he added.

Russia’s Foreign Ministry did not reply to a request for comment.

Sergei Markov, a former Kremlin advisor, said this month that things were looking good for Moscow.

“The new Syrian authorities do not see Russia as a hostile country. But Russia will have to do something favorable for the Syrian government in return for these bases,” he wrote on Telegram.

Syria’s dilemma

In an interview with Al Arabiya in late December, al-Sharaa acknowledged Syria’s “strategic interests” with Russia, which supplied the country’s now defunct army for generations and financed power plants and dams along with other key infrastructure.

In turn, with American troops in Syria’s northeast, Turkish forces in the north and Israeli troops newly in southern Syria, Russia is resolute in maintaining its only naval base in the Mediterranean.

Doing so would help Moscow retain political leverage amid a diplomatic scramble for sway over Damascus after al-Assad’s fall.

Russian Foreign Minister Sergei Lavrov met his Turkish counterpart in Ankara on Monday. Their talks included Syria, a Turkish source said. Turkey’s Foreign Ministry did not respond to a request for comment.

Damascus wants compensation for wartime destruction. Rebuilding costs are projected at $400 billion, according to the UN Economic and Social Commission for West Asia (ESCWA).

Moscow is unlikely to accept responsibility but instead could offer humanitarian aid, said a source familiar with Russia’s view on the matter,

In December, Putin offered the bases as hubs to deliver humanitarian aid to the Syrian people and Russia’s ambassador to the UN Vasily Nebenzya said Russia’s alliance with Syria was “not connected to any regime.” The UN aid source said they were unaware of any aid having been moved through the bases.

The fate of al-Assad and associates who fled to Moscow is a delicate matter. Russia remains resistant to surrendering al-Assad, insisting on continuity in its alliances, the Russian and diplomatic sources said.

“Russia does not simply give people up because the wind changes direction,” the senior Russian source said.

Rubble

Syria’s war, which erupted nearly 14 years ago with protests against al-Assad’s autocratic rule, left hundreds of thousands of people dead, some 13 million displaced and swathes of the country in ruins.

Driving from Damascus along the highway to the Russian bases, entire areas stand as grim reminders of Syrian and Russian airstrikes. Buildings are gutted or reduced to rubble.

Across the street from Hmeimim Air Base, shop owners sat in empty food stalls, lamenting their dire conditions in the dilapidated town.

In its markets, store signs are in Russian, but the soldiers no longer visit or linger in cafes, locals said.

“Russian soldiers used to come here to buy beer, whiskey and other drinks, but that’s stopped,” said the owner of a sandwich shop opposite the base. “Now, they only leave in convoys to their naval base. They don’t stop or venture out anymore.”