The removal of Syria from the US list of state sponsors of terrorism clears one of the biggest remaining obstacles to investment, opening the door for greater access to international banking, technology and capital. as the country rebuilds its war-ravaged economy.
The US move is expected to make it easier for Syrian banks to establish relationships with international lenders and for companies to attract foreign investment, although Syria remains on the Financial Action Task Force’s grey list for money laundering and terrorist financing.
“The removal of Syria from the US list of state sponsors of terrorism is a major step towards the gradual return of Syria to the global financial and banking system, and provides a strong signal that Syria continues to gain political and diplomatic acceptance globally,” said Nassib Ghobril, chief economist at Beirut's Byblos Bank.
The US State Department on Monday removed Syria from its list of state sponsors of terrorism, clearing a major obstacle in Damascus's economic recovery.
The delisting came after US President Donald Trump in July notified the US Congress of his intention to rescind Syria's designation as a state sponsor of terrorism.
Syria was placed on the US blacklist in 1979 due to the Syrian government's military occupation of Lebanon and its state-sponsored support for regional militant and terrorist groups, such as Hezbollah.
The latest development comes after US President Donald Trump repealed the Caesar Act in December, paving the way for more investment. The European Union also removed economic sanctions in May in a push to reintegrate Syria into the global economy.
Several sectors in Syria are expected to benefit from the latest decision by the US, including banking, technology and telecoms.
International payments could become easier, as Syrian banks seek relationships with correspondent lenders and regain access to the worldwide banking system. Banks use Swift, the global messaging network for sending secure payment instructions, to communicate with one another about international transactions.
Technology and telecoms sectors will also benefit, as Syria can import more western telecoms equipment to improve the functioning of the sector, as well as access advanced technology.
Syria has a large pool of skilled young people working in technology, programming and telecoms. However, restrictions on products and technology tied to these sectors remain strict to this day for individual consumers and institutions and consumers.
The US move will also support start-up firms in attracting capital and growing their businesses.
“The Syrian market is full of multisector opportunities that can be filled by everyone from large companies to small investors and entrepreneurs,” said Samer Hasn, senior market analyst at XS.com.
“However, entering the market for small entrepreneurs is not easy, given the country's generally difficult financial conditions, and attracting capital amid compliance policy restrictions and banking limits was nearly impossible”.
Syria's economy continues opening up following the toppling of the Assad regime in 2024 and the removal of some western sanctions last year.
Gulf states and companies including DP World are moving to invest in Syria. DP World is launching operations at the Tartus port, a project that includes an $800 million commitment to upgrade infrastructure. Saudi Arabia has also signed deals involving energy and infrastructure.
Other Gulf investments include an $18 billion commitment from Emaar founder Mohamed Alabbar for various projects in Syria. He also plans to launch operations of the e-commerce platform Noon in Syria.
“Reconstruction investment in Syria, for the first few years, is going to come via state-to-state transactions, with the US, Turkey and the Gulf countries at the forefront. Removal from the terror sponsors list is, effectively, a green light for that,” said Hasnain Malik, head of geopolitical risk and emerging markets equity strategy at Dubai-based Tellimer.
He also said FATF grey-list designation will not deter investors from investing in Syria, as it “is not a deal-breaker when one considers that the likes of Ivory Coast, Kenya, Kuwait and Vietnam are also currently on that list”.
Syria has been on the grey list since 2010, after the FATF found it had weak measures to combat money laundering and terrorist financing.
Last year, Syrian Finance Minister Yisr Barnieh said the country would be “out of the grey list very soon”.
