Designated in 1979 as a State Sponsor of Terrorism, Syria continued its political support to a variety of terrorist groups affecting the stability of the region and beyond, even amid significant internal unrest. Syria provided political and weapons support to Hizballah in Lebanon and continued to allow Iran to resupply the terrorist organization with weapons. The external leadership of Hamas, the Palestine Islamic Jihad (PIJ), the Popular Front for the Liberation of Palestine (PLFP), and the Popular Front for the Liberation of Palestine-General Command (PFLP-GC), among others, were based in Damascus and operated within Syria's borders though Hamas began leaving the country in late 2011 over disagreements regarding Syria's use of violence against protestors. Statements supporting terrorist groups like Hamas and Hizballah consistently permeated government speeches and press statements.

There was a decline in the number of foreign fighters entering northern Iraq from Syria in 2011.

President Bashar al-Asad continued to express public support for Palestinian terrorist groups as elements of the resistance against Israel. Damascus provided exiled individuals safe haven in Syria.

Added to the terrorist operatives calling Damascus home, Iraqi Baathists continued to congregate in the Syrian capital with some of them calling for violence against the Iraqi government, Iraqi civilian targets, and American and coalition forces within Iraq. Al-Rai Television, a television station owned by wanted international fugitive and U.S. Specially Designated National (SDN) Iraqi Baathist Mishaan al-Jaburi, broadcast from a suburban Damascus location, and transmitted violent messages in support of terrorism in Iraq throughout the year.

Syria was mired in significant civil unrest for most of 2011. Terrorist attacks have gradually increased on Syrian soil during this period, culminating in twin suicide attacks in Damascus on December 23. On April 29, armed assailants fired upon three police officers in the city of Homs, killing one and wounding two. On August 2, an attack in Idlib Province killed a political figure.

In none of these instances did any group claim responsibility. These and other attacks during the period of unrest have elicited responses from the government pointing toward al-Qa'ida involvement in Syria. As part of a broader strategy during the year, the regime has attempted to portray Syria as a victim of terrorism rather than a purveyor of it.

Syria has laws on the books pertaining to counterterrorism and terrorist financing, but it largely used these legal instruments against opponents of the regime, including political protesters and other members of the growing oppositionist movement. Furthermore, these laws were not enforced against Hamas, Hizballah, or the various Palestinian rejectionist groups based in Damascus.

Syria continued its strong partnership with fellow state sponsor of terrorism, Iran . Asad continued to be a staunch defender of Iran's policies. Iran also exhibited equally energetic support for Syrian regime efforts to put down the growing protest movement within Syria.

Syria remained a source of concern regarding terrorist financing. Industry experts reported that 60 percent of all business transactions were conducted in cash and that nearly 80 percent of all Syrians did not use formal banking services. Despite Syrian legislation that required money-changers to be licensed by the end of 2007, many money-changers in 2011 continued to operate illegally in Syria's vast black market, estimated to be as large as Syria's formal economy. Regional hawala networks remained intertwined with smuggling and trade-based money laundering and were facilitated by notoriously corrupt customs and immigration officials. This raised significant concerns that some members of the Syrian government and the business elite were complicit in terrorist finance schemes conducted through these institutions.

Syria is a member of the Middle East North Africa Financial Action Task Force, a Financial Action Task Force (FATF)-style regional body. It has been in the FATF International Cooperation Review Group process, under which it has made progress on its Anti-Money Laundering/Counterterrorist Finance (AML/CTF) regime. In 2011, Syria was named in the FATF Public Statement for its lack of progress on implementing adequate procedures for identifying and freezing terrorist assets, ensuring that financial institutions are aware of and comply with their obligations to file suspicious transaction reports in relation to AML and CTF and ensuring that appropriate laws and procedures are in place to provide mutual legal assistance.

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