Shaheen, Wilson, Warren Urge State Department to Remove Syria from State Sponsor of Terrorism List

WASHINGTON - Yesterday, U.S. Senator Jeanne Shaheen (D-NH), Ranking Member of the Senate Foreign Relations Committee, Representative Joe Wilson (R-SC) and Senator Elizabeth Warren (D-MA), Ranking Member of the Senate Committee on Banking, Housing and Urban Affairs sent a bipartisan letter to Secretary of State Marco Rubio urging the Administration to remove Syria from the State Sponsor of Terrorism (SST) list.

In the letter, Shaheen, Wilson and Warren argue that the legal basis for Syria's designation no longer applies following the fall of the Assad regime and that maintaining the designation is now a major obstacle to Syria's economic recovery, counterterrorism cooperation and long-term stability. They also stress that removing Syria from the SST list would advance U.S. national security interests by creating opportunities for responsible American and allied investment while reducing Syria's dependence on Russia, China and Iran. Shaheen, Wilson and Warren also argue that the removal of the SST designation does not mean deprioritizing pushing Syria to continue making progress in a variety of areas, such as decreasing Russian military presence, taking concrete steps to share power across Syria's diverse communities and ensuring women have a full seat at the table. Last month, the Senate Foreign Relations Committee advanced bipartisan legislation led by Ranking Member Shaheen and Senator Joni Ernst (R-IA) to repeal Assad-era sanctions while preserving authorities to target individual human rights abusers and other malign actors.

"Since the fall of the Assad regime, President Ahmed Al-Sharaa and the new Syrian government have demonstrated continued commitment to counterterrorism operations within Syria. While Syria does need to make more progress in a variety of areas, discussed further below, the grounds for the SST designation in U.S. law no longer apply and the listing remains a significant barrier to achieving the Administration and congressional priority of giving Syria a chance to succeed," wrote the lawmakers.

"U.S. financial institutions have been clear that the combination of export control requirements and reputational, insurance, legal and correspondent banking risks stemming from Syria's SST designation are too large and can trigger massive fines and loss of U.S. regulatory standing. The State Department has worked to give American businesses an advantage in investing in Syria, and while other barriers like the security situation also remain, removing the SST designation would meaningfully increase these financial institutions' ability to enable the private sector to operate in Syria," continued the lawmakers.

"The designation also undermines U.S. national security interests with respect to adversaries and competitors seeking to regain influence in Syria. As you argued in your confirmation hearing, Iran and Russia have been largely pushed out after supporting Assad's brutal rule, but they are pragmatic foreign policy operators who will exploit any U.S. failure to make the best of our opportunities. Their willingness to engage regardless of U.S. sanctions regimes gives them an advantage over responsible actors. For example, Russia continues to keep Syria reliant on Russian crude oil and wheat supplies while maintaining military bases from which it can project power in the region," concluded the lawmakers.

Full text of the letter is available HERE and provided below.

Dear Secretary Rubio,

We write to urge you to remove Syria from the State Sponsor of Terrorism (SST) list, where it currently sits alongside Iran, Cuba and North Korea. Since the fall of the Assad regime, President Ahmed Al-Sharaa and the new Syrian government have demonstrated continued commitment to counterterrorism operations within Syria. While Syria does need to make more progress in a variety of areas, discussed further below, the grounds for the SST designation in U.S. law no longer apply and the listing remains a significant barrier to achieving the Administration and congressional priority of giving Syria a chance to succeed.

The new Syrian government has joined the U.S.-led Global Coalition to Defeat ISIS and sustained counterterrorism cooperation with U.S. Central Command.^[1] Last month, in an annual report to Congress, the State Department removed Syria from a list of countries that do not cooperate with the U.S. on counter terrorism efforts.^[2] Additional State Department reports and briefings repeatedly highlight Syria as a willing and capable partner to deter terrorist groups.

In addition to addressing ISIS threats, the Syrian government has taken serious steps to degrade Hezbollah's networks in Syria, particularly by targeting transnational weapons and financial flows.^[3] For example, last month the Syrian Ministry of Interior arrested and deterred an attack from Hezbollah-linked terrorists who targeted a rabbi in Damascus.^[4] In March, President Al-Sharaa was the first leader in the region to publicly declare support for Lebanon's efforts to disarm Hezbollah.^[5] President Al-Sharaa's predecessor embraced the opposite: funding for Iran's proxy terrorist network was embedded in Assad's agenda and security apparatus. The stunning reversal by the new Syrian government changes the balance of power in the region.

Critically, U.S financial institutions have been clear that the SST designation represents a key remaining roadblock to Syria's financial connectivity, which is needed to facilitate private sector investment and billions of dollars pledged for economic recovery. According to the World Bank, Syria's reconstruction will cost an estimated $216 billion-or "nearly ten times Syria's projected 2024 GDP, underscoring the scale of the challenge and the immense need for international support."^[6] But financial institutions, including banks based in allied countries, are reticent to process financial transactions related to Syria or extend financing to U.S. and allied companies for projects in Syria due to the immense perceived risk of dealing with a country under an SST designation. U.S. financial institutions have been clear that the combination of export control requirements and reputational, insurance, legal and correspondent banking risks stemming from Syria's SST designation are too large and can trigger massive fines and loss of U.S. regulatory standing. The State Department has worked to give American businesses an advantage in investing in Syria,^[7] and while other barriers like the security situation also remain, removing the SST designation would meaningfully increase these financial institutions' ability to enable the private sector to operate in Syria.

The designation also undermines U.S. national security interests with respect to adversaries and competitors seeking to regain influence in Syria. As you argued in your confirmation hearing, Iran and Russia have been largely pushed out after supporting Assad's brutal rule, but they are pragmatic foreign policy operators who will exploit any U.S. failure to make the best of our opportunities. Their willingness to engage regardless of U.S. sanctions regimes gives them an advantage over responsible actors. For example, Russia continues to keep Syria reliant on Russian crude oil and wheat supplies while maintaining military bases from which it can project power in the region. In addition, China is gaining an enormous advantage by embedding itself in critical Syrian sectors like telecommunications and technology despite Syria's preference for U.S. and European companies.^[8] It is in our interest that Syria have options other than Iranian, Russian and Chinese entities.

Even with a removal of the SST designation, Syria will still have a long path ahead. We urge you to continue pressing the government on our shared priorities, including pressing Syria to do the following:

• continue to take credible steps to limit and eventually end Russia's military presence in Syria;
• share power among Syria's diverse communities and among others beyond those close to President Al Sharaa;
• ensure women have a full seat at the table including through opportunities to join the military and leadership roles;
• complete the removal of foreign fighters from leadership positions;
• officially designate groups like Hezbollah that they are already working against; and
• press forward with peaceful integration of the northeast and, eventually, the south of the country.

Removal of the SST designation does not mean deprioritizing these steps, which are critical to securing a free and prosperous future, just as waiver and eventual repeal of the Caesar Act did not mean deprioritizing these steps. Nor would the removal of the SST designation preclude the United States from applying targeted counterterrorism sanctions on individuals and entities as necessary. Rather, it is an acknowledgment that reliance on SST instead of more targeted tools for leverage is counterproductive to achieving our shared priorities.

Syria's SST designation represents the most significant remaining legal impediment to Syria's reconstruction. Its removal could create new opportunity for foreign investment, economic development and capacity building to ensure the Syrians can remain capable and willing partners to the United States. Thank you for your consideration and partnership.

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