The end of the State Sponsor of Terrorism designation would make it easier for international banks, investors and governments to engage with Syria [Getty]

Syria is expected to be formally removed from the United States’ list of State Sponsors of Terrorism on Saturday, clearing what is widely seen as the last major legal barrier to broad sanctions relief and deeper reintegration into the world economy.

The move follows US President Donald Trump’s decision to rescind Syria’s “terrorism” designation, which had been in place since 1979. The State Department notified Congress of its intention on 8 July, starting a legally mandated 45-day review period that is due to expire on Saturday evening.

Unless Congress acts to block the decision before the deadline, Secretary of State Marco Rubio is expected to issue the final determination and publish the removal in the Federal Register.

In comments to The New Arab, a State Department spokesperson said Rubio’s July recommendation to revoke the designation reflected his assessment that Syria had met the legal and political conditions required for removal.

The spokesperson did not say whether members of Congress had lodged formal objections. However, Congress has broadly supported the Trump administration’s push over the past 18 months to rescind sanctions imposed on Damascus, suggesting that a last-minute challenge is unlikely.

Syria’s removal from the list would not mean an end to all US measures against Syrian citizens. Washington is expected to retain targeted terrorism, human rights and corruption sanctions on figures and entities linked to the former Assad regime, including those accused of abuses during Syria’s civil war.

Major shift after decades of sanctions

Washington first listed Syria as a State Sponsor of Terrorism in 1979, placing it alongside other governments it accused of repeatedly supporting acts of “international terrorism”.

The designation was followed by successive waves of sanctions. In May 2004, the United States imposed further measures over allegations that Damascus supported terrorism, pursued weapons of mass destruction and maintained a military presence in Lebanon.

The sanctions regime expanded dramatically after the Syrian uprising began in 2011. The US froze assets linked to Syrian leaders and officials, including deposed dictator Bashar al-Assad, and imposed wide-ranging restrictions in response to the government’s violent crackdown on protesters and the subsequent civil war.

Trump terminated the broad US sanctions programme on Syria in June 2025, effectively dismantling the comprehensive Treasury framework that had restricted much of the country’s economic activity.

That included restrictions associated with the Caesar Syria Civilian Protection Act, which had threatened penalties not only for Syrian state bodies but also for foreign companies and governments doing business with them.

The end of the State Sponsor of Terrorism designation would remove a further category of restrictions, making it easier for international banks, investors and governments to engage with Syria.

“The cancellation of the designation of a state sponsor of terrorism will lead to the lifting of a set of restrictions and sanctions resulting from this designation,” the State Department spokesperson told The New Arab.

These include restrictions on certain forms of US foreign assistance, bans on exports and arms sales, controls on dual-use industrial and military goods, as well as financial and other restrictions, including some immigration-related measures.

Damascus seeks economic revival

The change comes as Syria’s post-Assad government, led by President Ahmed al-Sharaa, seeks to revive an economy devastated by more than 13 years of war, displacement, isolation and sanctions.

The conflict has inflicted an estimated $800 billion loss on Syria’s gross domestic product, according to figures cited by Syrian officials and international assessments. Damascus is now attempting to restore access to international financial systems, attract foreign investment and secure funding for reconstruction.

While many countries have eased or lifted restrictions since the formation of the new government, Damascus has continued to press Washington over the remaining US measures, which have discouraged commercial activity even after the winding down of broader sanctions.

Syrian Foreign Minister Asaad al-Shaibani met US Special Envoy for Iraq and Syria Tom Barrack in Istanbul on Monday, where the two discussed outstanding sanctions issues and avenues for rebuilding the Syrian economy, according to a statement from the Syrian foreign ministry.

Security commitments central to US decision

The Trump administration has presented the change as conditional on Syria’s security cooperation.

The State Department spokesperson said the United States supported “a united, stable Syria that lives in peace with its neighbors”, and a country that “refuses to be a safe haven for terrorist organizations and ensures the security of all minorities”.

One of the justifications for the US’s long-running designation of Syria as a “sponsor of terrorism” was its ties to Palestinian and Lebanese armed groups that the US considered to be “terrorist” groups.

The spokesperson said Trump’s 30 June 2025 executive order ending the Syria sanctions programme, together with the anticipated terrorism-list removal, represented “a new beginning for Syria”.

Damascus has sought to address Washington’s concerns by joining the US-led Global Coalition to Defeat ISIS in November 2025 and expanding operations against extremist groups in coordination with Washington.

The Syrian government has also moved against networks linked to Hezbollah inside Syria, reflecting a broader effort by the new leadership to distance Damascus from Tehran and demonstrate that it is no longer aligned with Iran’s regional military and ideological architecture.