Removing Syria from the US list of states sponsoring terrorism was not just a change in a political description that has been necessary since 1979, but rather a step that removes one of the heaviest legal and financial obstacles that prompted banks and investors to avoid dealing with it, even after the abolition of comprehensive US sanctions and the Caesar Act.
On Monday, US Secretary of State Marco Rubio announced the official cancellation of the classification after the expiry of the 45-day review period in Congress, with the decision taking effect immediately upon its issuance, and Iran, Cuba, and North Korea alone remaining on the list.
The US Treasury Department said that Syria is no longer subject to the restrictions stipulated in the regulations of governments on the terrorist list, while Rubio linked the decision to what he described as “positive measures and additional pledges” made by the government of President Ahmed Al-Sharaa to completely distance itself from acts of international terrorism.
It is expected that the direct and most prominent impact of the decision will appear in the banking sector, as Syria’s classification as a state sponsor of terrorism imposes restrictions on some financial transactions and places it at the highest levels of risk in the compliance departments of banks, insurance and investment companies.
The US Treasury confirmed that financial institutions in the United States are now able to provide services to Syria, process payments linked to Syrian banks, and open correspondent banking relationships with them, provided that the transactions do not include persons or entities that are still subject to sanctions.
Correspondent relationships are essential for carrying out transfers, foreign trade, and settling payments in dollars, as without them, the Syrian Bank would remain isolated even if direct sanctions were removed.
Before the decision was issued, Syrian Foreign Minister Asaad Al-Shaibani described the classification as “the last obstacle” to reconnecting Syria with the global financial and economic systems and attracting investments.
Early indications emerged of international institutions’ interest in the Syrian market, as the Syrian Ministry of Finance held talks with officials at Bank of America regarding cooperation and financial reintegration.
The classification of the state as a sponsor of terrorism entails four basic groups of US restrictions, including restricting foreign aid, banning defense exports and sales, tightening control over dual-use items, and imposing other financial and trade restrictions.
It also required the United States to oppose certain loans made to the classified country through the World Bank and international financial institutions.
Delisting removes the legal basis for these restrictions when they result from the classification itself, expanding the space for financial cooperation, aid and investments.
US Treasury Secretary Scott Besent said that the move will help attract more investments to Syria and support economic and political stability.
However, the decision does not mean that money and investments will flow automatically, as companies and banks will need to update their legal assessments, examine Syrian partners, and ensure that they are not linked to people or networks that are still on the sanctions lists.
The importance of the decision lies in that it completes a series of steps that preceded the deletion, after Washington ended the comprehensive sanctions program on Syria as of July 1, 2025, and then the Caesar Act was repealed in December of the same year. However, the terrorism sponsorship designation remained an independent risk source that banks and investment firms were wary of dealing with.
The resolution does not cancel the sanctions directed against Bashar al-Assad and his partners, those accused of human rights violations, Captagon drug dealers, members of ISIS and Al-Qaeda, and agents linked to Iran.
It also does not mean automatically allowing the export of weapons or all American technologies to Syria, because some of them are subject to separate export rules and licenses that require other regulatory decisions and procedures.
The US Treasury stressed that easing restrictions does not change its position on combating terrorism, nor its commitment to holding accountable those it described as “bad actors” inside Syria.
Concurrent with the country’s delisting, Washington revoked the remaining listing of the Al-Nusra Front, later known as Hay’at Tahrir al-Sham, as a Specially Designated Global Terrorist Entity, and removed the group from OFAC’s list of prohibited persons and entities.
Syrian President Ahmed Al-Sharaa described the decision as “historic,” and said in a video speech that Syria is shaking off the “black stain” and tearing up a page from its past to move toward development and reconstruction.
In turn, Al-Shaibani said that the classification was linked to the policies of the previous regime and was not an option for the Syrian people, considering that its removal came as a result of the transformation brought about by the Syrians and the commitment of the new state to cooperate with the international community.
