The Syrian government is betting that removal from Washington’s list of state sponsors of terrorism, a designation in place since 1979, will clear the biggest political and legal hurdle to its economic recovery. Alongside remaining sanctions, the designation has blocked any tangible gains from what was billed as a near-comprehensive lifting of international sanctions about a year ago. Sources in Damascus said the US hesitation was tied to Israel’s opposition to lifting sanctions. Other sources pointed to a mix of regional, international and domestic factors. In a recent phone call with US President Donald Trump, Syrian President Ahmed al-Sharaa asked for the remaining sanctions to be lifted, saying the move was essential to revive Syria’s economy, improve living conditions and attract investment. Syria remains caught in a complex sanctions web despite limited easing in recent months. Those measures covered Sharaa himself, the interior minister, the central bank, Syrian Airlines, the ports of Latakia and Tartus, and the Syrian Petroleum Company. Researcher and economic expert Ziad Arbash told Asharq Al-Awsat that the sanctions still in place include the Caesar Act, which has only been suspended repeatedly and temporarily for 180 days at a time, not permanently repealed, leaving investors facing uncertainty. They also include the state sponsor of terrorism designation, as well as broad secondary sanctions, including hundreds of measures still imposed by the United States, the European Union and the United Kingdom on individuals and entities. Other restrictions remain on technology exports, above all strict US curbs on dual-use civilian and military technologies, along with personal sanctions on fugitive former president Bashar al-Assad and his inner circle. Arbash said removing Syria from the state sponsors of terrorism list would unlock direct US investment, which had been fully banned, help reconnect Syrian banks to the global financial system, ease bank transfers and bolster international confidence. Washington says sanctions will continue to target people it accuses of human rights abuses, Captagon traffickers and other actors it sees as destabilizing the region. That position comes as US policy in the Middle East rests on the view that a US-centric balance of power works best when allies are encouraged to become more self-reliant and to share burdens through their interdependence and integration with one another. This is according to Tom Barrack’s first comments after taking up his new duties as special presidential envoy for Syria and Iraq. But Trump’s policy may be colliding with the realities of a Syria emerging from war. Abbas Sharifa, a researcher in international relations, said keeping Syria on the state sponsors of terrorism list raises “fundamental problems” that clash with the US view of Syria as a partner in the fight against terrorism. He said the United States arranged its withdrawal from Syria on the basis that “the Syrian state has become capable of confronting the threat of terrorism.” Reality also undermines the designation, he said, because “Syria today plays an important role in pursuing ISIS, has no relationship with Iranian militias and provides no support to any groups Washington considers terrorist organizations.” Sharifa said the delay in lifting the remaining sanctions was likely tied to political positions held by some pro-Israel members of Congress. Trump’s Syria policy, he said, has long run counter to Israel’s view, but “there appears to be Israeli pressure in some decision-making circles to obstruct this measure and link it to the signing of the security agreement with Israel, which has faltered because of Israeli intransigence.” He ruled out Syria’s commercial and military ties with Russia as an obstacle, saying that “the US administration itself granted exemptions for the export of Russian oil.” Across Syria, frustration has replaced the optimism that followed the partial lifting of sanctions. A year on, the economy remains far from real recovery, and the impact on daily life has been very limited, Arbash said. He said the reasons are complex. Remaining sanctions still prevent Western banks and companies from operating freely in the Syrian market. The United States and European countries will not move toward a full lifting of sanctions without the implementation of United Nations Security Council resolution 2254, an improved human rights record and guarantees for the safe return of refugees. Full repeal of the Caesar Act also requires approval from the US Congress, a lengthy process with political hurdles. “Even if sanctions were lifted completely today, the positive effects, such as investment inflows, would need months or years to appear on the ground,” Arbash said. He also pointed to international concern that aid or investment “could fund corruption unless there are transparent mechanisms to ensure it reaches the Syrian people.” Internal divisions are another obstacle. Some areas remain outside central government control, making it harder to apply unified economic decisions. Added to all these factors is Israeli opposition to lifting sanctions.
