Bottom lines up front<\/p>\n
WASHINGTON\u2014The act itself is routine for millions around the world each day. But Syrian leader Ahmed al-Sharaa made international headlines on Wednesday by using a credit card to pay for coffee in a Damascus restaurant. This method of payment would have been impossible just days earlier.<\/p>\n
Al-Sharaa uses a credit card at a restaurant in Damascus, Syria, on August 27, 2026. (@SYRIANRESPONSE via X and Reuters Connect)<\/p>\n
The purchase was made possible by Monday\u2019s announcement that the US Department of State removed<\/a> Syria from the State Sponsor of Terrorism (SST) list and revoked the designation of al-Nusrah Front, also known as Hay\u2019at Tahrir al-Sham (HTS), as a Specially Designated Global Terrorist (SDGT) organization. While US President Donald Trump has gradually eased sanctions on Syria since the ouster of dictator Bashar al-Assad in December 2024, the removal of Syria from the SST list and revocation of the designation on HTS eliminated a major impediment to Syria\u2019s desired integration into the global economy. And this allowed the coffee purchase\u2014a transaction involving a US financial corporation that would have been prohibited by the previous sanctions regime.<\/p>\n What is the SST list and what is its impact?<\/p>\n The US secretary of state has the power to formally designate a foreign government as an SST if it has \u201crepeatedly provided support for acts of international terrorism\u201d pursuant to the Export Administration Act of 1979, the Foreign Assistance Act of 1961, the Arms Export Control Act, or any other relevant provision of law.\u00a0<\/p>\n The list of designated state sponsors of terrorism is published every year on April 30. As of now, three countries are on the list<\/a>: Cuba, Iran, and North Korea. Syria\u2019s designation had been in place since 1979\u2014longer than any other country currently on the list.\u00a0\u00a0<\/p>\n The effects of an SST designation are vast and can hobble the economy of a designated country. These include bans or limitations on trade, aid, and access to the US-dominated global financial system. Obvious restrictions apply to any military or defense items, but bans can also extend to the sale of technology and communications items that have both civilian and military uses. And while financial backing from Saudi Arabia and Qatar allowed Syria to become eligible<\/a> for World Bank loans, countries on the SST list often face hurdles in accessing aid money from the World Bank, the International Monetary Fund, and other institutions. Indeed, concerns from the US State Department that an SST designation would disrupt delivery of humanitarian aid to occupied areas in Ukraine was one publicly stated reason that Russia was not placed on the SST list<\/a> when the idea was proposed after Russian forces launched their full-scale invasion of Ukraine.<\/p>\n Another layer is the unofficial impact of an SST designation on discouraging foreign investment. Even where such activity would not be strictly prohibited, investors are not incentivized to put their money into SST countries due to a range of factors, including a lack of transparency around terrorism financing. Attorneys advising investors and companies also tend to recommend compliance measures that go beyond what the law requires, erring on the side of caution for their clients and minimizing potential legal liability.<\/p>\n What happened on Monday?<\/p>\n The process that led to the US State Department\u2019s announcement on Monday began earlier this summer. On July 8, the department announced that Trump had notified Congress of his administration\u2019s intent to remove Syria from the SST list. This kicked off a forty-five-day congressional review, resulting in Monday\u2019s announcement.\u00a0<\/p>\n The removal from the SST list was the next logical step in the warming relations between Trump and al-Sharaa. The two first met<\/a> in Riyadh in May 2025, and al-Sharaa<\/a> subsequently visited the White House in November 2025. Sanctions relief and security discussions have been at the core of US-Syria talks throughout the past year.<\/p>\n Additionally, the removal of HTS from the SDGT list was important for the legitimacy of Syria\u2019s new government, since al-Sharaa and many in his cabinet were part of HTS. This allowed the US Department of the Treasury\u2019s Office of Foreign Assets Control (OFAC) to then remove HTS from the Specially Designated Nationals and Blocked Persons List (known as the \u201cSDN List\u201d). Back in July 2025, the US secretary of state revoked the Foreign Terrorist Organization designation<\/a> for HTS\u2014a separate terrorism designation by the US government\u2014so the SDGT listing was the last hurdle to US engagement with the organization and its members.<\/p>\n All these moves combined mean that Syria is now open for business\u2014certain transactions previously prohibited by the sanctions no longer need special licenses or general licenses from OFAC.<\/p>\n Why now?<\/p>\n One potential reason the Trump administration made this move now is China, which is expanding trade with Syria. According to data from the Observatory of Economic Complexity<\/a>, exports from China to Syria increased by more than 300 percent, from $33.3 million to $150 million, between June 2025 and June 2026. This outpaced<\/a> US exports to Syria in the same period and is largely driven by the sale of technology.<\/p>\n As long as Syria remained on the SST list, sales by US and allied companies of electronics, computers, telecommunications, and other products considered \u201cdual-use\u201d would continue to be subject to lengthy delays for licensing exceptions. All SST countries are in country group E<\/a> within the US Export Administration Regulations set by the Bureau of Industry and Security (BIS)\u2014which bans these exports from the US unless waivers are obtained.<\/p>\n BIS can now remove Syria from that list. Earlier this year, Syria\u2019s Ministry of Communication and Information Technology said<\/a> that US restrictions on trade \u201chinder the availability of many American technologies and services in the Syrian market,\u201d and that it would welcome US business once conditions allowed.<\/p>\n US concerns about Syria turning to Chinese technology also involve national security<\/a>, not just sales numbers. From a US national security perspective, the sale of US and European technologies to Syria is preferred.<\/p>\n One example of how the SST designation proved a hindrance to this cooperation was in Syria\u2019s dealings with the Finnish telecom company Nokia. In August 2025, the Syrian Ministry of Communication and Information Technology announced<\/a> the return of Nokia to the Syrian market. However, the finalization of a $30,000 deal for Nokia to sell telecommunications equipment to the Syrian parliament was delayed for months<\/a> until Nokia finally obtained a US license in June<\/a>. The delay risked forcing Syria to turn to other sources for the telecommunications support, such as China\u2019s Huawei.\u00a0<\/p>\n What comes next?<\/p>\n There are several important developments for Syria\u2019s reintegration into the global economy that are enabled by the country\u2019s removal from the SST list, but they are not automatic.\u00a0<\/p>\n The first step is for BIS to remove Syria from country group E, reserved for SSTs. BIS could take this step within a few weeks, or wait for months. An updated advisory<\/a> issued jointly by the US Departments of Commerce, State, and Treasury indicates that \u201cfurther regulatory adjustments to the Export Administration Regulations (EAR) are expected\u201d\u2014but they did not give a timeline.<\/p>\n Another question is whether Syria will be added to country group B, which is subject to less stringent license review policies. The countries neighboring Syria in group B include Jordan, Lebanon, Turkey, and Israel. However, Iraq\u2014despite not being an SST\u2014is in country group D, which has far more restrictions. Following the US Department of State\u2019s removal of Sudan from the SST list in December 2020, Sudan was added to country group B<\/a> a month later. Adding Syria to country group B at a similar pace would hasten the ability of Western companies to enter the Syrian market.<\/p>\n The second development to look out for is whether Syria\u2019s government will negotiate a settlement with the US government to address the more than $31 billion<\/a> in outstanding court judgments against Syria under Section 1605A of the United States Code, or what is commonly referred to as the \u201cterrorism exception\u201d to the Foreign Sovereign Immunities Act (FSIA). The FSIA grants foreign states immunity from suit in the United States, subject to limited exceptions, one of which concerns terrorism-related activities by an SST-designated state. This has resulted in multiple suits in US courts against Assad\u2019s Syria. Plaintiffs include a Syrian-American doctor<\/a> subjected to torture, the sister of an award-winning journalist<\/a> who was killed in Syria, and hundreds of people<\/a> alleging that they were harmed by Assad providing material support to Hamas and other militant groups. Suits are still being filed<\/a> even following Syria\u2019s removal from the SST list, and more than a hundred additional cases remain pending with the possibility of an additional $100 billion or more in damages. Compare that to Syria\u2019s projected gross domestic product this year of $60\u201365 billion<\/a> and it is easy to see that the math will not add up.\u00a0<\/p>\n Given these cases, Syria\u2019s government is likely looking to retain legal counsel in Washington, DC that is well-versed in FSIA litigation and enforcement. Syria\u2019s leaders and the state\u2019s legal representatives can draw on precedents set by countries previously removed from the SST list. For example, after the overthrow of Iraqi President Saddam Hussein, Congress passed legislation that permitted the US president to make the terrorism exception to immunity inapplicable to Iraq, depriving the courts of jurisdiction over then-pending actions. Then the Libyan Claims Resolution Act, signed by President George W. Bush in August 2008, required Libya to pay money into a settlement fund to compensate American victims of terrorism, after which Libya\u2019s immunity to suit in US courts for injuries resulting from terrorist acts would be restored. This arrangement was unsuccessfully challenged<\/a> in court by some plaintiffs. Similarly, Congress passed the Sudan Claims Resolution Act in December 2020 to restore immunity to Sudan from terrorism exception lawsuits. Sudan agreed to pay hundreds of millions<\/a> out to claimants with existing judgments, and did indeed deliver on the payments<\/a>.<\/p>\n