Enab Baladi – Zeinab Dawwa
In recent months, counterfeit currency has noticeably spread in Syrian markets, which have witnessed transactions in dollars and other currencies after the fall of the Assad regime, which used to prohibit the circulation of any foreign currency in official markets.
The arrival of the Turkish lira and dollars from areas in northern Syria or carried by Syrians coming from abroad has led to an increase in currency exchange activities, and soon it became a quick-profit business, with much counterfeit money circulating, especially in Syrian currency.
University student Maya Abboud said that she tried to send an amount to her family in the city of Jableh, but the transfer company discovered that she was carrying three counterfeit notes of 5,000 without her knowledge.
She added that a citizen who does not have enough experience finds it difficult to differentiate between counterfeit currency and legitimate currency, and can easily fall victim to the fraud and scams of counterfeiters and currency promoters in the market.
With the decline in the value of the currency against the dollar and inflation in Syria, many people do not check all the financial bundles during exchanges or commercial transactions due to the time it takes, and thus, counterfeit notes can easily be mixed in.
Maya is not the only one who has fallen victim to this phenomenon; Abdurrahman, a dentist, told Enab Baladi that after receiving a sum from one of his patients, he discovered that all the bills had different textures and colors, indicating that many people mix counterfeit coins with legitimate ones and sell them.
Goldsmith Youssef Ali in the Mezzeh area of Damascus said that many customers want to exchange money but discover they are carrying counterfeit currency without realizing it.
Lost 99% of its value
Dr. Abdurrahman Mohammed, Vice Dean of the Faculty of Economics for Administrative Affairs and Student Affairs at Hama University, told Enab Baladi that the Syrian pound has suffered a severe collapse, losing more than 99% of its value against the dollar since 2011, which has made it susceptible to counterfeiting due to the low cost of printing small denominations compared to the potential gains.
He stated that the phenomenon of counterfeiting currency in Syria is one of the symptoms of an economic structural crisis that requires comprehensive solutions, starting with strengthening border controls and regulatory oversight, continuing with monetary policy reforms, and concluding with restoring political stability, which is a prerequisite for economic recovery. Without radical remedies, this problem will continue to dismantle the monetary and social framework of the Syrian market.
For his part, Dr. Abed Fadliah, a professor at the Faculty of Economics at the University of Damascus, believes that one of the main reasons for promoting counterfeit currency is the relative weakness of oversight on the one hand and the evolution of counterfeiting techniques on the other hand. Perhaps the third and most important reason is the existence or development of gangs that engage in this activity.
What are the causes of counterfeiting?
The weakness of government oversight and the lack of trust in the local currency have driven some counterfeiters to print counterfeit money to compensate for the liquidity shortages. Additionally, the weakness of security and regulatory institutions has led to the spread of organized counterfeiting networks operating relatively easily. This has been exacerbated by the lack of advanced systems to detect counterfeit currency (such as security threads or special inks), according to Dr. Abdurrahman Mohammed, Vice Dean of the Faculty of Economics at Hama University.
He further explained that the growing demand for cash in the parallel market, due to international sanctions, has led most transactions to shift to the informal sector, which has increased the demand for cash (including counterfeit currency) to finance daily activities. Moreover, the spread of corruption and money laundering through borders with neighboring countries has also played a role.
He clarified that the opening of the market has allowed large quantities of counterfeit currency to be smuggled across borders, especially from countries experiencing unrest (like Lebanon and Iraq), where Syria is used as a route for smuggling counterfeit money.
Impacts of currency counterfeiting
Dr. Abed Fadliah, from the Faculty of Economics at the University of Damascus, told Enab Baladi that the phenomenon of currency counterfeiting, its expansion, and its rampant nature have negative economic effects, as it allows members of the counterfeiting entity to amass wealth and increases the quantity of money available for purchase without actual goods or services to correspond.
He explained that counterfeiting generally leads to a relative rise in prices, particularly for products in sectors where the proceeds of the counterfeiting are spent.
This increase in prices has negative social effects, manifesting in the weakening of the currency’s purchasing power, and consequently, resulting in obtaining fewer satisfactions with the same amount of currency.
The increase in the quantity of counterfeit money in the market raises the monetary supply without productive backing, increasing inflationary pressures. This is according to Dr. Abdurrahman Mohammed, who explained that counterfeit currency raises inflation rates, diminishing the value of citizens’ savings and exacerbating poverty.
Dr. Mohammed pointed out that the spread of counterfeit currency undermines trust in the monetary system for both local and foreign investments due to the risks associated with dealing in unstable or counterfeit money.
He noted that cash transactions without official records have become prevalent, weakening tax collection and reducing state revenues.
The problem of counterfeiting further isolates Syria financially and complicates its dealings with global financial institutions (like the International Monetary Fund), according to Dr. Mohammed.
What are the duties of the Syrian state?
Dr. Abed Fadliah emphasized that controlling and preventing counterfeit currency is an essential economic, monetary, and social necessity.
He explained that relevant governmental and supervisory authorities must intensify and develop their methods to combat counterfeiting at all stages. “The process of counterfeiting involves distribution channels and the distribution of counterfeit proceeds, which necessitates that the regulatory agencies train and qualify their staff to understand the foundations of the counterfeiting process and how to eliminate it.”
Monitoring and tracking the plans, steps, and methods of currency counterfeiting operations require integration and cooperation between various governmental agencies on the one hand and the entities directly responsible for this matter, specifically the financial and banking authorities, along with other marketing and regulatory bodies, in coordination with private sector institutions, including agricultural, industrial, and commercial chambers.
How does Syrian law deal with this matter?
Lawyer Munib al-Yousfi told Enab Baladi that the Syrian legislator has allocated a specific place for counterfeit currency in the Syrian Penal Code, clearly differentiating between the “creator of the crime” and the “facilitator,” meaning between the one who counterfeits the currency and the one who promotes it.
According to Article “430” of the Syrian Penal Code, anyone who counterfeits a coin or paper currency, whether Syrian or foreign, and issues it for circulation or does not issue it, is punished with temporary hard labor for a period of 5 to 15 years.
Al-Yousfi stated, “Intent reveals the truth, not the result. The one who is skilled in drawing and adept at inking doesn’t necessarily mean they are an artist; they might be a traitor if their intent is to undermine trust and destabilize the economy. The counterfeiter is one who intentionally fabricates the counterfeit with knowledge and premeditation, creating disaster from nothing and threatening the state’s security from the citizen’s pocket.”
As for the promotion of counterfeit currency, such as spending, circulating, introducing it into the country, or transporting it, the punishment for those involved varies according to their mental and cognitive state. If they know it is counterfeit, the penalty can reach up to seven years of hard labor, according to Article “433” of the Penal Code. However, if it is proven that they traded it without knowing it was counterfeit and later found out and did not report it, the penalty is reduced and may not exceed one year or involve a monetary fine, as the law takes the intent into account, differentiating between those who aimed to deceive and those who were deceived, according to al-Yousfi.
He explained that the Cassation Courts in Syria have confirmed the severity of penalties for professional counterfeiters, considering them a “direct threat to the national economy,” while they have been more lenient with promoters acting in good faith, especially if it is proven that the currency reached them from a third party, without intent or collusion.
Counterfeiting currency is not just a financial crime but an attempt to assassinate public trust and undermine the national economy, according to lawyer Munib al-Yousfi, speaking to Enab Baladi.
Recently, the Central Bank of Syria (CBS) announced that in cooperation with the Police of Damascus Governorate, they seized unlicensed exchange and remittance businesses and confiscated counterfeit funds and some foreign counterfeit currency, urging citizens not to deal with any unlicensed entity to avoid potential harm.
Counterfeit currency gangs undermine Syrian economy Enab Baladi.
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