The United States Tuesday imposed punitive measures on two Syrian money services it said help the government maintain access to the international financial system in violation of sanctions.

This was Washington's first action targeting Syria since its readmittance to the Arab League.

The US Treasury Department in a statement accused the two money service businesses, Al-Fadel Exchange and Al-Adham Exchange Company, of helping President Bashar al-Assad's government and its allies, Hezbollah and Iran's Quds Force, an arm of its Revolutionary Guards (IRGC).

The sanctions, imposed under the Caesar Act that also levied a tough round of sanctions on Syria in 2020, come after Arab states earlier this month turned the page on years of confrontation with Assad and readmitted Syria to the Arab League, a milestone in his regional rehabilitation even as the West continues to shun him after years of civil war.

The move came as what seemed to be policy change by Saudi Arabia as it restored diplomatic ties with Iran in March after seven years tensions.

Regional countries - including Saudi Arabia, Qatar and others - had for years supported anti-Assad rebels, but Syria's army - backed by Iran, Russia and allied paramilitary groups - regained most of the country. The icy ties with Assad began to thaw more quickly after devastating earthquakes in Syria and Turkey in February.

The United States has said it will not normalize ties with Assad and has said Syria did not merit readmission into the Arab League.

With reporting by Reuters