U.S. Moves To Rescind Syria’s Designation As A State Sponsor Of Terrorism: Key Compliance Considerations

Our Partner, Lorenzo Mulazzi, shares his insights on the U.S. Administration’s proposed rescission of Syria’s designation as a State Sponsor of Terrorism, highlighting the key legal, sanctions, and export-control considerations that businesses should assess before pursuing commercial opportunities in Syria.

On 8 July 2026, the U.S. Department of State announced that President Donald J. Trump had informed Congress of his Administration’s intent to rescind Syria’s designation as a State Sponsor of Terrorism (“SST”), subject to the statutory congressional notification and review process.

This development marks a further step in the broader recalibration of U.S. sanctions policy towards Syria, following the change in the Syrian political landscape and the establishment of the new Syrian government under President Ahmed al-Sharaa.

The announced rescission follows a series of prior U.S. measures aimed at easing sanctions and export-control restrictions on Syria. In particular, the United States has recently adopted measures intended to support new investment, private-sector activity, financial services and commercial engagement with Syria.

However, the U.S. authorities have also made clear that the sanctions relief does not extend to terrorist organisations, human rights abusers, persons involved in chemical weapons or proliferation activities, drug trafficking networks, or other destabilising actors. Certain restrictions may also continue to apply to transactions involving U.S.-origin goods, software or technology.

From a business perspective, the proposed removal of Syria from the SST list may facilitate Syria’s reintegration into international trade and financial channels and may reduce certain legal and reputational barriers for international operators. Nevertheless, this should not be interpreted as a complete removal of all compliance risks.

Companies considering transactions involving Syria should continue to conduct targeted due diligence, including on: counterparties and beneficial owners; possible OFAC or other sanctions listings; links with the former Syrian regime, terrorist organisations or destabilising actors; end-use and end-user restrictions; U.S.-origin goods, software and technology; payment flows involving U.S. financial institutions or U.S. dollars; and the possible application of EU, UK, UN or other sanctions regimes.

In particular, EU operators should also consider the current EU framework. Although the EU lifted all economic sanctions on Syria in May 2025, with the exception of those based on security grounds, it has maintained targeted restrictive measures against individuals and entities linked to the former Syrian regime and against other persons or entities involved in serious human rights abuses or destabilising activities.

In light of the above, the recent U.S. announcement represents an important opening for future commercial engagement with Syria, but it does not eliminate the need for a transaction-specific sanctions and export-control assessment.

Eptalex’s professionals remain available to assist clients with Internal Compliance Programs, export-control classifications of items, contractual clauses, counterparty due diligence, training and the legal assessment of transactions involving Syria or other high-risk jurisdictions.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.