The US delisting won't unlock Syrian reconstruction money until the banking rails are fixed

The US move to delist Syria as a State Sponsor of Terrorism (SST) is a positive signal for business, but it doesn’t fix what’s actually keeping capital out. The SST designation had become “a very good excuse for many companies to not really deal with Syria directly,” Karam Shaar Advisory’s Senior Consultant Benjamin Feve told EnterpriseAM. It imposed a reputational and compliance burden that kept banks, ins. providers, export-control officers, and board risk committees skeptical about investing in Syria even after the Caesar Act repeal removed most formal restrictions. Lifting it takes away that excuse, but doesn’t address the core issues.

The real blockers are banking connectivity and compliance. Syria was on the SST list long before 2011, and international players still wired money in and invested in the country. What broke under Bashar Al Assad in the post-2011 era was connectivity to the international banking system. Even with every sanction lifted, SWIFT theoretically restored, and Visa and Mastercard back in play, a bank still flags a USD 1 mn or a USD 1k transfer. FATF gray-listing is the harder gate, and the delisting from this one likely won’t come until 2027, we were told, even when FATF is due for another annual update next October.

The capital that has moved isn’t commercial: Private sector inflows so far are politically and personally driven — a few dozen USD bns, mostly Gulf money driven by the desire to be part of Syria’s rebuilding. Even in the CMA CGM investments in Latakia Port, the executive in charge has Latakia origins. Mainstream commercial investment hasn’t followed. Everyone sees the opportunity, but everyone is also cautious about the same things — snapback risk, a possible US political shift, and a dragging war.

Dual-use tech is the one area where the effect will be clearest. Washington already relaxed controls on dual-use tech exports to Syria in 2025 for telecoms, sanitation, power generation, and civil aviation. Delisting should make export licensing easier for rebuilding actors that depend on controlled components — airport systems, telecom infrastructure, and aviation. That still comes with a caveat. Turkey remains the most comfortable actor in providing dual-use tech to Syria, while Europe and the US may not be there just yet despite the SST delisting.

SOUND SMART- US export controls put rails on exports of dual-use tech — products with both military or civilian uses (think radars in airports or engines for aircraft). Exporters — whether they’re American or a foreign firm using US inputs — need a license from the US government to sell to an SST-designated country.

In a best-case scenario, the delisting eases correspondent banking, trade finance, payment channels, and ins. compliance as Syria moves out of the terrorism bucket, Feve says. But banks will still ask about counterparty risk, sanctions exposure, Assad-era ownership, corruption, and judicial credibility before moving.

Why this matters: With a reconstruction bill running to the USD hundreds of bns, and Syria’s own banks unable to finance it, Syria needs all the money it can get — not in two or three years, but right now. Most of the pledges made over the last year haven’t cleared their way in, and even those fall short of what Syria needs to jumpstart the economy.