Syria’s removal by the United States from its “state sponsors of terrorism” list clears one of the last major hurdles to the country’s integration into the global financial system, analysts tell Al Jazeera. On July 8, US President Donald Trump announced he was formally notifying Congress of his intention to rescind Syria’s designation, which had been in place since 1979. A 45-day congressional review period passed on Saturday, and the US completed the formal delisting on Monday.
While Washington had already lifted many of the restrictions preventing transactions with Syrian banks, the “terrorism” designation continued to carry additional financial and trade restrictions, and Syria’s removal will give the country – still struggling to pick itself up after a nearly 14-year war – a badly needed economic boost. Syria was first designated by the US as a “state sponsor of terrorism” in 1979 under the presidency of Hafez al-Assad. The country was originally placed on the list for its support of Palestinian armed groups.
Syrian-US relations were later strained when the US invaded Iraq in 2003, just a few years after Hafez died and his son Bashar succeeded him. Washington pulled out of its embassy in Syria in 2012, a year after Syrians rose up against the al-Assad regime, which responded with brutal suppression and violence, leading to war. During the conflict, Syria became increasingly isolated from the global community as more international sanctions were placed on the regime.
When the al-Assad regime finally collapsed in December 2024, a new government, including members of former rebel groups, took its place. One of its first priorities was trying to reintegrate Syria into the regional and international community by removing the sanctions, which has largely been accomplished. Syrian President Ahmed al-Sharaa and Hayat Tahrir al-Sham, the former rebel group he led, were also previously under US sanctions, which have been removed.
While Syria has moved on from its isolation since the fall of al-Assad, its economy remains weak with almost 90 percent of the population living below the poverty line. Ibrahim Kochaji, a Syrian banking and economic expert, called the lifting of the sanctions “a pivotal moment in the trajectory of the national economy” but said it was “not an immediate remedy” for the country’s deep economic struggles. Kochaji said any resolution to Syria’s issues requires “a long path of reforms and measures” that would be bolstered by stability and sound governance.
And many Syrians still speak about the improvements to their day-to-day lives since the regime’s demise. But increasingly, Syrians are expressing frustration at the soaring cost of energy and the stuttering local economy. Kochaji said the removal of sanctions would impact Syrians daily lives but the impact may not be as immediate as some may hope.
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