Syria’s leader Ahmad Al Shara returned from the Nato summit in Ankara this week brandishing a letter from US President Donald Trump. It carried the large Sharpie pen signature of Mr Trump, who outlined a process he had set in motion to rescind Syria’s designation as a state sponsor of terrorism.
The designation was the last major sanction by a western nation against Syria. Mr Al Shara was a guest at the summit, where he met Mr Trump and other leaders, in the latest western recognition of the post-Assad state as a bulwark against Iran and an anti-terrorism partner.
In December, the US Congress backed a permanent repeal of sanctions against Syria but the terrorism designation was kept under review. Some US and European sanctions remain on former Assad regime operatives and associates, as well as those regarded as terrorists.
The new repeal is expected to be approved by the Republican-controlled Congress in the next 45 days, lifting a measure imposed in the late 1970s when Syria was ruled by Hafez Al Assad, father of Bashar Al Assad. Rebels led by Mr Al Shara ousted the younger president in 2024.
Mr Trump acted on a promise to “remove all barriers stopping you from rebuilding your country”, he wrote in the letter, which said US companies “are ready to invest in Syria” and make it “more prosperous”.
Mr Al Shara considered it such a foreign policy triumph that he posed with the letter on board the plane that took him back to Damascus. Syria’s Foreign Minister Asaad Al Shibani hailed it as the end of a “dark chapter”, harking back to when the former regime was supporting militant groups in the Middle East.
However, rescinding the designation could have “huge” practical implications, particularly for linking the country with the international banking system and boosting direct trade, according to Syrian industrialist Omar Al Ghraoui.
“It is tremendous vote of confidence,” Mr Al Ghraoui, the managing director of Syrian building materials manufacturer TGP, told The National. He said it ushers in the return of Syria to “the international business map” and encourages “a lot of investors” from the Syrian diaspora and worldwide, who have been reluctant to take “concrete steps” because the terrorist designation had remained.
Mr Ghraoui expected international banks “to review and reassess their current compliance measures, and relax them with respect to trade and payments related to Syria”. He forecast a “positive impact on the willingness of different international producers of raw material, for example, in our domain, to begin supplying us directly”.
A World Bank study last year estimated the cost of rebuilding Syria after the civil war at $216 billion, nearly 10 times the country’s current gross domestic product. Syria’s GDP fell by more than half between 2010, the year before civil war broke out, and 2024. Per capita income dropped to $830 in 2024, compared with $2,500 in 2010.
The Syrian pound is trading at 13,000 to the dollar, 10 per cent weaker than in December 2025, when the bulk of the US sanctions were lifted. The exchange rate was 50 Syrian pounds to the dollar at the onset of the March 2011 revolt against Assad family rule. By the end of that year, Syria was in a state of civil war.
Foreign projects launched under the new government have been mostly awarded to Gulf investors and directed mainly towards property and building a new terminal at Damascus Airport. However, the closure of the Strait of Hormuz since the Iran war began in February has promoted regional interest in Syria as an alternative land route.
Last year, both western Europe and Washington removed almost all of the sanctions in Syria as part of its integration into the new order. The sanctions had been toughened in response to the Assad regime’s crackdown on the 2011 revolt.
However, the terrorism designation, according to the US State Department, results in restriction on US foreign assistance and bans on defence exports and sales. It also leans to controls over exports of dual use items, and “miscellaneous financial and other restrictions”. Penalties could be also imposed “on persons and countries engaging in certain trade” with the four state sponsors listed: Cuba, North Korea, Iran and Syria.
Jihad Yazigi, founder and editor of the Syria Report, an economy and business newsletter, said it was not clear how much the designation had affected western investments in Syria. He said such investments were in any case rare during the former regime. However, some western companies, such as ConocoPhillips, which had a gas concession, operated in Syria.
Mr Trump’s decision to remove the designation is “morale boosting”, Mr Yazigi said, pointing out that Syria can soon “say that all sanctions have been lifted”.
However, no credit agencies are yet willing to guarantee investments in the country and some investors are not comfortable with government‘s militant past, Mr Yazigi added. Syria also remains “without a functioning banking sector”, as well as a “challenging” security situation, he said. In the past week, three bomb explosions in Damascus killed 11 people.
“The real problem today is more related to implementation,” Mr Yazigi said.
