The United States has removed Syria from its list of state sponsors of terrorism, ending a designation that dated back to 1979 and lifting a major legal barrier to foreign investment in the country.
The move by the Trump administration completes a rapid diplomatic realignment following the fall of Bashar al-Assad and the rise of Syria’s new president, Ahmed al-Sharaa, a former militant once linked to al-Qaeda. Washington has embraced al-Sharaa despite his past ties to armed Islamist groups.
The terrorism sponsor designation had exposed foreign companies and governments to secondary sanctions and severely restricted Syria’s access to international finance. Its removal opens the way for reconstruction contracts, banking relationships, and capital flows that were effectively frozen for decades.
Syria had held the designation longer than any other country. It carried automatic restrictions on foreign assistance, a ban on defence exports, and controls over dual-use goods, alongside financial penalties that deterred international lenders from any exposure to the Syrian economy.
The decision follows a broader thaw between Washington and Damascus under al-Sharaa, who took power after Assad was ousted. The new government has sought to present itself as a partner to Western and Gulf states as it pursues funds to rebuild after years of civil war.
Other governments have already moved to re-engage with Damascus. China previously signalled support for Syria’s return to the regional fold and pledged assistance toward rebuilding efforts, positioning itself among the external powers courting the reconstruction market.
The delisting removes one of the last remaining obstacles for international firms weighing entry into Syria, though other sanctions regimes tied to specific individuals and entities are expected to require separate review before large-scale investment can proceed.
Reconstruction needs across Syria run into the hundreds of billions of dollars after more than a decade of conflict. Gulf states and regional investors are seen as the most likely early participants, with energy, infrastructure, and construction among the sectors expected to draw interest.
The administration has framed its outreach to al-Sharaa as part of an effort to stabilise Syria and reduce the country’s isolation. Critics have questioned the speed of the embrace given the new president’s militant background.
Further steps on remaining US sanctions are expected to be addressed in subsequent decisions as Washington calibrates its relationship with the Damascus government.