Syria has cleared a major obstacle to foreign investment after the United States removed the country from its state sponsors of terrorism list.
The decision, which took effect on Monday, marks another significant step in Washington’s expanding engagement with Syria’s new government.
Damascus has described the move as a crucial development that could help reconnect Syria with the global financial system.
It could also encourage international companies, banks and investors to explore opportunities in a country seeking to rebuild after years of war.
US Removes Syria From Terrorism Sponsor List
The United States placed Syria on its state sponsors of terrorism list in 1979, accusing the government of Hafez al-Assad of supporting militant groups.
The designation remained in place during the rule of his son, Bashar al-Assad, despite major changes in Syria’s political and security landscape.
Bashar al-Assad was eventually toppled in December 2024 by rebels led by current Syrian President Ahmed al-Sharaa.
The latest decision followed a 45-day congressional review period that began after President Donald Trump notified Congress on July 8.
US Secretary of State Marco Rubio linked the decision to commitments and actions taken by Syria’s current government under Sharaa.
“These actions were all taken in recognition of the positive actions taken and further commitments by the Syrian government under President Ahmed al-Sharaa to fully distance Syria from acts of international terrorism,” Rubio said.
The decision leaves Cuba, Iran and North Korea as the three countries remaining on Washington’s state sponsors of terrorism list.
The United States also removed the Nusrah Front from its designation as a Specially Designated Global Terrorist organisation.
Damascus Sees Opportunity for Investment
Syria’s government has welcomed the decision as an important step toward restoring economic activity and attracting international investment.
Foreign Minister Asaad al-Shibani had previously described the terrorism designation as the “last obstacle” to Syria’s broader economic reintegration.
“There is no longer any obstacle to investment, doing business and rebuilding economic life in Syria,” he said.
The designation had created significant legal and compliance risks for international banks and companies considering business opportunities in Syria.
Therefore, its removal could make it easier for foreign investors to assess projects and establish commercial relationships within the country.
Syria is seeking billions of dollars in investment to rebuild after nearly 14 years of conflict and extensive economic disruption.
However, the latest decision does not remove all restrictions affecting Syria, as Washington continues targeted sanctions against several individuals and groups.
US Had Already Eased Broader Syria Sanctions
The latest move comes after the Trump administration ended comprehensive US sanctions against Syria in July 2025.
Washington nevertheless maintained targeted measures against Bashar al-Assad and his associates, rights abusers, drug traffickers and several militant organisations.
The remaining sanctions also target Islamic State and Al Qaeda affiliates, along with Iranian proxies operating in the region.
Meanwhile, the US Treasury has said American financial institutions can provide certain services involving Syria under permitted conditions.
Those services include processing payments involving Syrian banks and establishing correspondent banking relationships, provided sanctioned parties are not involved.
Even so, the terrorism designation continued to create additional uncertainty for financial institutions and international businesses.
Its removal could therefore reduce some of the compliance concerns that previously discouraged companies from entering the Syrian market.
Global Financial Interest Begins to Grow
Signs of growing international interest in Syria had already emerged before Washington removed the designation.
Syria’s Finance Minister Mohammad Yisr Barnieh held discussions with Bank of America executives earlier this month about potential cooperation.
The talks also focused on Syria’s possible reintegration into the international financial system after years of isolation.
Bank officials reportedly expressed willingness to visit Syria and continue discussions about potential cooperation.
Meanwhile, Mastercard has already moved toward supporting Syria’s financial connectivity with international markets.
In May, the company announced cooperation with QNB Group and Syria’s central bank to prepare infrastructure for international card payments.
Mastercard has described itself as an early investor in Syria and said it wants to connect Syrian consumers and businesses with global payment networks.
These developments indicate that international financial institutions are beginning to assess opportunities linked to Syria’s economic reopening.
Washington and Damascus Deepen Engagement
The removal of Syria’s terrorism designation follows months of negotiations between Washington and Damascus over economic and foreign policy issues.
Trump announced his intention to remove the designation after meeting President Ahmed al-Sharaa in Ankara in July.
In a letter seen by Reuters, Trump told Sharaa that he had promised to “remove all barriers” preventing Syria from rebuilding.
The negotiations also involved Syria’s energy and foreign policy relationships, including its dependence on Russian oil.
According to sources familiar with the discussions, Damascus agreed to significantly reduce imports of Russian oil during negotiations over the designation.
The development reflects a broader shift in Washington’s approach toward Syria under Sharaa’s leadership.
Trump has increasingly embraced engagement with Sharaa, who previously commanded Al Qaeda’s Nusra Front before breaking ties with the global jihadist network in 2016.
Sharaa later led the rebel coalition that overthrew Bashar al-Assad and established Syria’s new political leadership.
Washington has since highlighted cooperation between Sharaa’s government and the United States against Islamic State.
The US has argued that easing restrictions can give Syria greater opportunity to stabilise, attract investment and rebuild its economy.
For Damascus, the removal of the terrorism designation could therefore become an important turning point in its effort to reconnect with global markets.
The decision does not guarantee an immediate economic recovery, but it removes one of the major barriers that had complicated international investment.
As Syria seeks to rebuild its economy, greater access to international finance could become increasingly important for reconstruction and long-term economic development.
