By Rachel Alpert
On 29 December 1979, the State Department issued the first ever list of State Sponsors of Terrorism under section 6(j) of the recently enacted Export Administration Act of 1979. The countries on this inaugural list were Iraq, Libya, South Yemen, and Syria. South Yemen was removed from the list in 1990, when it merged with the Yemen Arab Republic; Iraq was removed in October 2004 following the ouster of Saddam Hussein; and Libya was removed in June 2006, after it ended its weapons of mass destruction (WMD) program. Today, Syria is the last remaining inaugural member of the State Sponsor of Terrorism (SST) list. That may change this week.
On 8 July 2026, Secretary of State Marco Rubio announced that President Trump had “informed Congress of his administration’s intent to rescind Syria’s designation as a State Sponsor of Terrorism, following a 45-day pre-notification period.” Syria may therefore be removed from the SST list as early as 22 August 2026.
Contours of Syria Sanctions Relief
Removing Syria from the SST list represents one of the final steps of sanctions relief, as President Trump directed in Executive Order 14312. Other steps have included:
Termination of the Syria Sanctions program, which had imposed comprehensive sanctions on Syria;
Congress’s repeal of the Caesar Syria Civilian Protection Act of 2019, which had imposed mandatory secondary sanctions on those providing certain support to Syria and its government; and
Initial export control relief, which was possible due to the executive order’s waiver of certain restrictions in the Syria Accountability and Lebanese Sovereignty Restoration Act of 2003 and the Chemical and Biological Weapons Control and Warfare Elimination Act of 1991.
Aside from the restrictions that derive from the SST designation, the remaining U.S. sanctions relevant to Syria involve Assad or terrorist-related actors that are still designated by name on the Treasury Department Office of Foreign Assets Control’s (OFAC) List of Specially Designated Nationals and Blocked Persons. This includes Hayat Tahrir Al-Sham (HTS), the organization that overthrew Assad and that Syria’s current leader, Ahmed al-Sharaa, previously led. HTS has been removed from UN, UK, and EU sanctions, and is no longer designated as a Foreign Terrorist Organization in the U.S., but remains sanctioned as a Specially Designated Global Terrorist group. To address potential impacts of the HTS designation on transactions with the current Syrian government, OFAC has retained General License No. 25, which authorizes otherwise prohibited transactions with Syria’s Government, among others.
Given the limited scope and impact of remaining sanctions relevant to Syria, the removal of Syria’s SST designation will have far-reaching consequences for the advancement of Syria sanctions relief.
Impact of Removal
Delisting Syria will reduce barriers to its financial flows, facilitate further export control relief, end restrictions on foreign assistance and government contracting, and restore Syria’s sovereign immunity in U.S. courts.
Financial Flows
The combination of perceived and actual legal risk has made global financial institutions unwilling to support transactions with or investment in Syria while the SST designation remains in effect. As a bipartisan congressional letter noted, financial institutions are hesitant to process transactions or extend financing to projects in Syria “due to the immense perceived risk of dealing with a country under an SST designation.” Such risks may include sanctions prohibitions applicable to Terrorism List Governments and concerns that funds may be used to support terrorist attacks, leading to human harm and legal risk under statutes like the Anti-Terrorism Act.
The removal of Syria’s SST designation will therefore remove a major obstacle to Syria’s financial integration. This comes at an important time. In March, the Central Bank of Syria reactivated its account at the Federal Reserve Bank of New York. Earlier this month, Syria received a $100 million World Bank grant for financial sector modernization. In addition, the Financial Action Task Force (FATF) is gearing up to commence its first Mutual Evaluation process for Syria since 2006.
Export Controls
Stringent export controls also follow from an SST designation. Under US export control law, the U.S. Department of Commerce’s Bureau of Industry and Security (BIS) implements these through Syria’s Country Group E designation. Following Syria’s SST removal, BIS will be able to remove Syria from Country Group E and change the de minimis threshold for U.S. export control jurisdiction from 10% to 25%, meaning that fewer items destined to Syria will be subject to U.S. export control.
With these changes, Syria would also be eligible for additional license exceptions under the Export Administration Regulations (EAR), and exports to Syria would no longer be subject to the most stringent anti-terrorism-related controls. These changes will not be an automatic result of SST removal; rather, they are contingent upon BIS publishing a rule change to amend the EAR.
Syria’s removal from the SST list will also lift the arms embargo and prohibition on foreign military sales under the Arms Export Control Act. To implement this change, the State Department would need to amend the International Traffic in Arms Regulations (ITAR) to remove Syria from the list of arms embargoed countries in ITAR section 126.1(d)(1).
Foreign Assistance and Government Contracting Restrictions
Delisting will also lift stringent restrictions on U.S. foreign assistance. Specifically, section 620A of the Foreign Assistance Act of 1961 prohibits virtually all foreign assistance to SSTs. Unlike the export control changes, this restriction ends automatically on delisting, removing a major barrier to U.S. assistance for Syria. U.S. government contracting restrictions that prohibit contracting or subcontracting with a firm that is owned or controlled by the government of a SST will also cease to apply.
Sovereign Immunity
SST status provides an exception to sovereign immunity under section 1605(a) of the Foreign Sovereign Immunities Act. While the designation is in place, victims of terror can recover damages against Syria in U.S. courts for personal injury or death that was caused by torture, extrajudicial killing, aircraft sabotage, hostage taking, or the provision of material support or resources for such acts. Delisting will end this exception, though U.S. victims will have six months from the date of delisting to bring claims for damages incurred while the SST designation was in force.
The Road to Economic Integration
The lifting of most U.S. sanctions on Syria has been significant, but one major step toward full termination had yet to come. The designation of Syria as a State Sponsor of Terrorism represented the last major legal barrier imposed by the U.S. to Syria’s engagement in the global economy. The upcoming and long-awaited delisting is critical for opening financial channels that allow funds to flow more readily into the country. While additional U.S. government action is needed, Syria’s SST delisting allows export controls to be relaxed.
Beyond these tangible changes, shedding the label of State Sponsor of Terrorism also lifts a reputational burden and paves the way for economic engagement off the table up until today. As the Syrian people continue on the long road to rebuilding their country following the devastation of the Assad era, the removal of Syria from the SST list after nearly five decades is a significant step both legally and symbolically.
Rachel Alpert is a Partner at Jenner & Block, where she co-chairs the firm’s National Security and Crisis and Human Rights & Global Strategy Practice Groups. She previously served as Chief Counsel to the U.S. Department of the Treasury’s Office of Foreign Assets Control and as an Attorney-Adviser in the U.S. Department of State’s Office of the Legal Adviser. She lived in Damascus, Syria from 2008 - 2009.