Syria’s State Sponsor of Terrorism Designation Is Blocking Its Recovery

On May 22, the State Department released a set of “Investor Guides” intended to encourage U.S. companies considering investment opportunities in Syria. The guides, the department wrote, signaled “American confidence that Syria can be a credible destination for responsible investment, enterprise and integration” and that “real opportunities exist across sectors—electricity, oil and gas, technology, telecommunications, real estate and banking.” By all accounts, the message was clear: invest in Syria and here’s how best to do it.

But things are anything but clear when it comes to the U.S. legal architecture toward Syria, as U.S. law continues to effectively preclude investment in Syria. The primary reason for this is a legal designation that has outlived its justification. Since 1979, Syria has appeared on the U.S. State Sponsors of Terrorism (SST) list, a status that triggers a range of financial restrictions, including heightened scrutiny on financial transactions, limits on access to U.S. financial institutions, the freezing of certain sovereign assets subject to U.S. jurisdiction, a near-total ban on defense exports, and stringent controls on the export of dual-use goods and technologies.

This status was originally imposed because of the Assad regime’s support for violent nonstate armed groups operating against U.S. allies and interests. The Assad regime is now gone. The conduct that justified the designation belongs to a government that no longer exists. Yet the designation remains—and its consequences are devastating Syria’s prospects for recovery. Even where investment is not technically prohibited under U.S. law, risk-averse compliance departments decline to authorize transactions involving Syria, unwilling to assume the reputational and legal exposure that comes with doing business in a country bearing the SST designation.

Syria is trying to rebuild from the ashes of one of the most devastating civil wars in modern history. 13 million people have been displaced. Cities have been reduced to rubble, with reconstruction costs assessed anywhere from $216 billion to $900 billion. And while many U.S. sanctions have been removed at record speed based on a clear strategic interest in fostering a stable, cooperative Syria, the stalled process of removing the SST designation is making the realization of that vision immeasurably harder.

A Designation Without a Predicate

When the United States designates a country as an SST, it triggers a dense web of legal, financial, and diplomatic consequences. Among the most consequential is the Foreign Sovereign Immunities Act terrorism exception, which strips the designated state of sovereign immunity and allows U.S. plaintiffs to sue it in federal court for acts of torture, extrajudicial killing, hostage taking, and related conduct. Plaintiffs present their evidence to a federal court; the defendant state never appears; a default judgment is entered. It is litigation on easy mode—and it has produced staggering results against Syria.

Since 2011, U.S. courts have entered more than $31 billion in judgments against Syria. At least 186 additional cases remain pending, some seeking billions of dollars individually. A conservative estimate of the total liability Syria could face—including pending cases—runs between $100 billion and $150 billion. Syria’s entire annual gross domestic product had fallen to approximately $21 billion as of 2014. The World Bank’s best estimate for reconstructing Syria’s damaged physical assets is $216 billion. The mathematics are unforgiving: Syria’s existing legal exposure already exceeds its entire annual economic output, and the judgments keep coming.

This is not a theoretical problem. Every dollar Syria is required to divert toward satisfying legacy judgments from the Assad era is a dollar that cannot rebuild a home, school, or hospital. Every Syrian asset connected to the U.S. is at a risk of attachment by judgment holders, giving Syria strong incentives to avoid the very commercial engagement with U.S. markets that reconstruction financing requires. The designation does not just constrain Syria politically—it traps it financially.

To make matters worse, the SST serves as an extremely powerful deterrent to any U.S. business otherwise interested in engaging and investing in Syria’s recovery, of which there are many. While part of the U.S. government champions U.S. business interests in Syria and proactively facilitates efforts to get major U.S. players into prime positions for contracts, another part continues to hold these efforts hostage. For now, the SST revocation is a file on the desk of Secretary of State Marco Rubio, who is thought to want to retain leverage on Syria’s government to achieve more progress on a list of conditions set out in the December 2025 revocation of the Caesar Act, a set of sanctions that President Trump signed into law in December 2025. Yet those conditions—particularly focused upon internal stability, ensuring minority rights, achieving domestic justice and accountability—are not legally tied to the SST and their substance has no bearing on whether a government is deemed to be a sponsor of terrorism.

The Wrong People Are Paying

There is a deeper inequity here that U.S. policymakers have been slow to confront. The Syrian people did not sponsor terrorism. They suffered under the government that did. Over more than a decade of civil war, millions of Syrians were killed, tortured, disappeared, or driven from their homes by the Assad regime. They were the primary victims of the conduct that gave rise to these judgments. Maintaining the designation ensures that they—through the diversion of their state's scarce resources—continue to pay for it.

Judgments entered against Syria under the Foreign Sovereign Immunities Act are enforceable for 12 years under the laws of the District of Columbia, where most of them are entered, but the judgments can be renewed indefinitely. Syria cannot simply turn the page. Even as the new government pursues normalization and rejects the prior regime’s conduct, the legal architecture of the prior regime’s sins follows it. This is not accountability—it is inheritance of liability by people who had no role in creating it.

Syria Has Changed. The Designation Has Not.

The factual predicate for Syria’s designation has fundamentally shifted. The new Syrian government is not the Assad regime by another name. It has pursued active diplomatic normalization with the U.S., including a visit by President al-Sharaa to the White House in November 2025—the first visit by a Syrian head of state to the White House in U.S. history. It has joined the U.S.-led Global Coalition to Defeat ISIS, coordinating on intelligence-sharing, border security, and counterterrorism operations. Within 18 months of Syria’s transitional government coming to power, ISIS’s operational tempo has collapsed to record lows, an insurgency backed by Iran and Hezbollah has been effectively defeated, and more than 215 million Captagon pills, an amphetamine-type stimulant, have been seized in a campaign coordinated with Syria’s regional neighbors. Syria has also joined the ICRC’s Global Initiative to Galvanize Political Commitment to International Humanitarian Law, reaffirmed its commitments under the Chemical Weapons Convention and achieved consequential progress alongside the Organization for the Prohibition of Chemical Weapons to identify, seize, and eliminate remaining stockpiles from the Assad era.

These are not the actions of a state sponsor of terrorism. They are the actions of a state seeking reintegration into the international order. The SST framework is supposed to be a tool of behavioral change—a designation imposed to penalize conduct and create incentives for reform. When a government demonstrates that reform, the designation should follow the facts. Keeping Syria listed alongside Iran, North Korea, and Cuba does not reflect the current reality. It reflects the one that existed 45 years ago.

A Better Deal for Victims

Delisting Syria is not about letting anyone off the hook. It is about creating conditions under which U.S. victims can actually recover something—rather than holding unenforceable paper judgments that produce nothing.

The precedents are instructive. When Libya was removed from the SST list in 2006, it negotiated a settlement of $1.5 billion to resolve claims related to acts of terrorism for which it had been held responsible, including the 1988 Lockerbie bombing and the 1986 Berlin discotheque attack. In one case alone, a U.S. court had previously ordered Libya to pay $6 billion. The settlement delivered real compensation—less than the judgment’s face value, but infinitely more than victims would have received from a state that had no intention of paying.

When Sudan was delisted in 2020, it paid $335 million, supplemented by $150 million from the U.S. under the Sudan Claims Resolution Act, settling cases that had produced individual judgments in the billions. Victims recovered less than the face value of their judgment awards. But they recovered something. And something, in this context, is not a minor concession—it is the difference between partial justice and none at all.

The pattern is consistent: delisting unlocks accountability and reparations rather than foreclosing them. A Syria settlement framework, structured to account for the country’s post-conflict economic constraints and drawing on potential contributions from regional partners such as Saudi Arabia, Qatar, and Turkey—each of which has strong interests in Syria’s stability—could deliver meaningful compensation where current enforcement mechanisms deliver almost nothing.

Without delisting, most judgment holders will receive nothing. Syria has no incentive to appear in U.S. courts, engage with U.S. financial institutions, or allow its assets to be exposed to attachment. The cycle of default judgments and zero recovery will continue indefinitely.

The Authority Exists. The Pathway Is Clear.

The Trump administration has everything it needs to act. U.S. law provides two mechanisms for removing a country from the SST list. The first requires the president to certify that the country has not supported terrorism for at least six months and has provided assurances it will not do so in the future. The new Syrian government has been in place for 18 months, and every public indication suggests that Syria is now a state actively combating—rather than sponsoring—terrorism. The president’s six-month certification could be made today.

The second pathway is even more direct. The president may certify that there has been a fundamental change in a country’s leadership and policies, that the government does not support terrorism, and that written assurances have been provided against future support. This pathway—used to delist Iraq in 2004 following the fall of Saddam Hussein—requires no waiting period and is not contingent on any timeline. It is precisely tailored to the circumstances Syria now presents.

President Trump’s Executive Order 14312, issued in June 2025, directed the secretary of state to review Syria’s designation. The December 2025 Tri-Seal Advisory from the departments of state, treasury, and commerce confirmed the review is ongoing. The legal framework is in place. The factual predicate is satisfied. The policy arguments are strong across every dimension—for Syria’s stability, regional security,  U.S. strategic interests, and the victims who deserve more than the judgments they cannot collect.

What Is Being Waited For?

Syria’s designation made sense when it was imposed. It reflected the conduct of a regime that actively supported terrorism against U.S. allies and interests. That regime is gone. What remains is a devastated country, a new government seeking its place in the international community, and a legal architecture that threatens to strangle the reconstruction before it begins.

The United States has a rare opportunity to advance multiple goals simultaneously: supporting Syria’s stabilization, creating a pathway for victim compensation through a negotiated settlement, unlocking U.S. and international investment in reconstruction, and demonstrating that the SST framework is a meaningful instrument of policy—one that responds to changed reality rather than imposing permanent punishment on populations that have already paid an incalculable price.

Removing Syria’s designation is not a concession. It is an overdue recognition that the facts have changed—and that U.S. policy should change with them.