By Vittorio Maresca di Serracapriola and Natasha Hall
Issue 6: February 2026
At a Glance
- UN Removes HTS from Terrorism Sanctions List — The UN Security Council delisted Hay’at Tahrir al-Sham from the Resolution 1267 sanctions regime, lifting UN-mandated asset freezes, travel bans, and arms embargo measures against the group.
- US Reportedly Removing Syria from State Sponsor of Terrorism List — Reports suggest Washington may delist Syria by early April 2026, potentially easing barriers to exports and trade.
- State Sponsor of Terrorism Designation Blocks Syria’s Shift from Chinese to US Telecom Systems — The US reportedly warned Damascus against adopting Chinese telecom infrastructure and encouraged a pivot to US or allied technology, but residual controls and compliance risks continue to limit viable procurement options.
- EU Considers Shifting Syria Sanctions Toward Transition Spoilers — An EU non-paper proposes a conduct-based model targeting spoilers (armed actors, rights violators, corrupt brokers, drug smugglers), while keeping existing Assad-linked listings.
- Canada Eases Syria Sanctions — Ottawa relaxed key Syria-related restrictions and removed dozens of listed entities while newly designating six individuals linked to sectarian violence and Assad-era WMD financing.
- Saudi-Syrian Deals Test Whether Sanctions Rollback Has Reopened Payment Rails — Saudi Arabia announced major investments in airports, telecommunications, and aviation, signaling a push to operationalize cross-border financing into Syria following recent sanctions easing.
Contents
UN Removes HTS from Terrorism Sanctions List
On 27 February, the UN Security Council, acting pursuant to resolutions 1267 (1999), 1989 (2011), and 2253 (2015) concerning ISIL (Da’esh), Al-Qaeda, and associated individuals, groups, undertakings, and entities, removed Hay’at Tahrir al-Sham (HTS) from the “ISIL (Da’esh) and Al-Qaida Sanctions List.” As a result, the UN asset freeze, travel ban, and arms embargo no longer apply to HTS, also known as the Jabhat al-Nusrah.
CONTEXT AND ANALYSIS: On 6 November 2025, the UN Security Council adopted a resolution removing Syria’s Interim President Ahmad al-Sharaa and Interior Minister Anas Khattab from the UN 1267 sanctions list, which targets individuals associated with al-Qaeda and the Islamic State of Iraq and the Levant (ISIL). The Council had listed both in 2013 and 2014 for pledging allegiance to al-Qaeda, although they later renounced the group and fought against it.
Despite HTS delisting, the UN 1267 Monitoring Team’s 37th comprehensive report identifies Syria as a central theatre for ISIL activity. The report assesses that ISIL retains roughly 3,000 fighters across Syria and Iraq, with most based in Syria. It also highlights ISIL’s infiltration of newly formed Syrian security structures, including at lower and mid-level ranks. This affects the operational and security environment for the economy.
The delisting of HTS marks a significant step toward dismantling some of the sanctions barriers affecting Syria’s reintegration into the global economy. HTS’s continued designation by the UN had functioned as a de facto sector-wide restriction, given the group’s centrality to the post-Assad political order.
The move could encourage member states to delist HTS, since it is pursuant to Chapter VII of the UN Charter, which obliges member states to implement UN sanctions domestically. HTS remains designated by the US as a Specially Designated Global Terrorist (SDGT) and by the EU. With the UN listing now lifted, the legal basis for maintaining these designations has weakened.
The UN designation sustained a high-risk compliance environment for actors linked to, or perceived as aligned with, HTS. Even as state-linked financial institutions such as the Commercial Bank of Syria received additional latitude, their proximity to the new authorities continued to inhibit efforts to reintegrate Syria into the global economy.
The delisting improves this risk calculus. Western banks with global operations can now operate with greater certainty that transactions involving the Syrian government do not violate a UN-mandated asset freeze. In a centralized post-Assad system, ministries and national agencies control public wages and social services, trade and customs policy, energy governance, infrastructure tenders, land use, and sovereign borrowing. Even where only a minority of ministers have direct HTS military backgrounds—and a larger subset previously served in the HTS-aligned Syrian Salvation Government—banks, insurers, and contractors had feared that funds or economic resources could be made available “directly or indirectly” to a listed entity through discretionary state channels.
The removal of the HTS listing—and the associated lifting of the UN arms embargo—may also ease concerns over security-sector support, particularly regarding end-use risks for equipment, training, or dual-use assistance routed through ministries previously perceived as adjacent to HTS structures.
US Reportedly Removing Syria from State Sponsor of Terrorism List
The US administration is reportedly preparing to remove Syria from the list of State Sponsors of Terrorism (SST), where it has remained since 29 December 1979. In an interview with the Lebanese media outlet Al-Modon, Samer al-Safadi—a political affairs consultant and activist with the Syrian-American lobby—cited Senator Jim Risch (R-Idaho), chair of the Senate Foreign Relations Committee, as confirming that the committee is actively coordinating with the administration and expects Syria to be removed from the list by early April 2026.
CONTEXT AND ANALYSIS: Despite recent US efforts to dismantle elements of the Syria sanctions regime, Syria continues to face significant export controls tied to SST-related restrictions under Section 1754(c) of the National Defense Authorization Act for Fiscal Year 2019 (primarily affecting export controls), Section 40 of the Arms Export Control Act (covering munitions items), and Section 620A of the Foreign Assistance Act of 1961 (governing foreign assistance). In addition, the SST designation strips Syria of sovereign immunity under the Foreign Sovereign Immunities Act (FSIA), exposing it to litigation in US courts.
If the Department of State proceeds with delisting, responsibility would shift to the US Bureau of Industry and Security (BIS) within the Department of Commerce to update the Export Administration Regulations (EAR), which govern the export and re-export of dual-use goods, technologies, and software. Based on the regulatory changes BIS implemented following Sudan’s removal from the SST list, this process would likely include removing Syria from EAR Country Group E:1 and raising the de minimis threshold from 10 to 25 percent. Under US export regulations, the de minimis threshold determines the level of controlled US-origin content in a foreign-manufactured product that subjects the entire item to US export control jurisdiction. This change would significantly reduce the number of foreign-manufactured products subject to US export controls when destined for Syria.
Delisting would also make Syria eligible for additional license exceptions under the EAR and eliminate the most restrictive, terrorism-related export controls. Together, these adjustments would ease access to machinery, components, and consumer goods needed for reconstruction, investment, and routine business operations, lowering barriers to economic recovery. None of these changes, however, will take effect until the US formally removes Syria from the SST list and BIS issues a corresponding rule amending the EAR.
SST Designation Blocks Syria’s Shift from Chinese to US Telecom Systems
The US has reportedly warned Syria against relying on Chinese technology in its telecommunications sector, arguing that such reliance conflicts with US interests and poses national security risks. For Washington, the risk is that Chinese-supplied core network and tower equipment could enable privileged access to data and traffic transiting Syria, providing a foothold for cyber operations affecting US interests in the region. US officials conveyed this message during a meeting between a State Department delegation and Syrian Communications Minister Abdulsalam Haykan in San Francisco on 24 February. During the meeting, the State Department reportedly urged Syrian authorities to adopt American technology or technology supplied by US allies for the telecommunications sector.
CONTEXT AND ANALYSIS: Syria is reportedly exploring the procurement of Chinese technology to support its telecommunications towers and the infrastructure of local internet service providers. Syrian officials have cited the time-sensitive nature of infrastructure development projects and emphasized Damascus’s desire to diversify vendors. While Syria has signaled openness to partnering with US firms, officials stress that urgency remains high and that export controls and over-compliance continue to constrain options. That itself may strengthen Washington’s incentive to pursue an SST delisting pathway.
Syria’s telecommunications infrastructure has long depended on Chinese technology, largely as a consequence of US sanctions imposed on successive Assad governments following the 2011 crackdown on anti-government protests and the ensuing civil war. Huawei technology reportedly accounts for more than 50 percent of the infrastructure used by Syriatel and MTN, the country’s only telecom operators.
The SST designation is not a sanctions measure that licensing flexibility or compliance sophistication can mitigate. It imposes structural constraints, including secondary exposure concerns—namely the risk that non-US firms, banks, or intermediaries could face US legal or regulatory exposure for facilitating transactions involving Syria, even when those transactions are otherwise lawful—alongside correspondent banking restrictions, and reputational red lines that even well-advised institutions will not cross without formal removal. As Washington urges Damascus to pivot toward American suppliers, these structural barriers remain firmly in place. Pressing for such a shift while the SST designation persists—absent clear safe-harbor guidance or a credible pathway to removal—amounts to a demand without the means to meet it. It remains to be seen whether, even with delisting, US companies will force a rapid pivot given Chinese vendors’ entrenched footprint.
EU Considers Shifting Syria Sanctions Toward Transition Spoilers
The EU’s diplomatic service reportedly proposed shifting from a sanctions framework designed to punish Bashar al-Assad’s rule to one aimed at managing Syria’s fragile transition. The new model would target actors who undermine the transition, rather than focusing solely on figures linked to the former regime, including armed groups, human rights violators, corrupt reconstruction brokers, and drug-trafficking networks. A non-paper circulated to member states argues that the EU needs to “adapt the sanctions regime” to better support its decision to reinitiate political and economic engagement with Syria, describing the current system as a “relic from the past” that continues to deter legitimate business activity. Under the proposal, discussed on 24 February, existing rules targeting Assad-linked figures would remain in place for now, leaving the EU’s current listings unchanged. The non-paper also signals that the bloc could delist Syria’s Interior and Defence ministries, which remain under sanctions, to “further facilitate cooperation” with the post-Assad authorities.
CONTEXT AND ANALYSIS: On 28 May 2025, the EU lifted all economic sanctions on Syria except those based on security grounds, including restrictions on weapons and technologies that could be used for internal repression. Brussels said it would maintain Assad-related sanctions in line with its accountability commitments and continue monitoring developments on the ground. During a visit to Damascus in January, European Commission President Ursula von der Leyen announced EUR 620 million in EU support for the new government in 2026–27. EU foreign ministers are also debating whether to reactivate the trade chapter of the 1978 Cooperation Agreement between the European Economic Community and Syria, frozen after Assad’s decade-long crackdown on protesters.
By targeting “active spoilers”—such as drug-trafficking networks and corrupt reconstruction brokers—rather than the state apparatus itself, the EU may be mirroring the September 2025 decision of the US Treasury’s Office of Foreign Assets Control (OFAC) to rebrand its Syria Sanctions Framework as the “Promoting Accountability for Assad and Regional Stabilization Sanctions Regulations.” OFAC moved Syria out of the category of comprehensively sanctioned jurisdictions and narrowed restrictions to specific individuals and entities implicated in human-rights abuses, war crimes, and narcotics trafficking.
Although the EU’s move, if adopted, aims to address the systemic de-risking that continues to stifle legitimate commerce and humanitarian activity, it could create new challenges for Syria. Many of these actors are diverse and dispersed within the government, population, and economy, thereby raising due diligence and compliance costs for foreign firms wanting to engage with Syria.
Canada Eases Syria Sanctions While Targeting Sectarian Violence and WMD Financiers
Canada’s Foreign Minister Anita Anand announced on 18 February a relaxation of sanctions imposed on Syria while simultaneously imposing new sanctions on six individuals. The changes ease restrictions on the import and export of goods, investment activities, and the provision of financial and other services, including those related to telecommunications monitoring and petroleum transactions. The amendments also remove 24 entities and one individual from the Syria Regulations, aiming to reduce barriers to economic activity and enable transactions with state-affiliated entities in sectors critical to Syria’s recovery.
Canada also introduced two new listing criteria under the Syria Regulations, allowing authorities to designate individuals and entities involved in gross and systematic human rights violations, as well as those undermining Syria’s peace, security, and stability. Canada listed four of the newly sanctioned individuals for their involvement in the March 2025 wave of sectarian violence in Syria. Authorities listed the remaining two individuals for financing the Assad regime’s chemical and ballistic missile weapons programs.
CONTEXT AND ANALYSIS: In December 2025, Canada had removed Syria from its list of states that support terrorism, citing a similar move by the US and the Syrian government’s efforts to stabilize the country under President Ahmad al-Sharaa. Canada’s foreign ministry also revoked HTS’s terrorist designation under the Criminal Code.
In March 2025, Ottawa announced plans to ease sanctions and committed CAD 84 million (approximately USD 64.1 million) in new humanitarian assistance for Syria. Canada also issued a six-month general permit allowing Canadians to carry out otherwise prohibited financial transactions and services in support of democratization, stabilization, and humanitarian aid delivery.
The 18 February amendments open legal space to engage with core state-linked sectors of the Syrian economy: the Central Bank and much of the domestic banking system; a cluster of state oil and fuel distribution firms, including the Syrian Petroleum Company and Mahrukat; two major telecom operators, Syriatel and El-Tel; several state-aligned media outlets; Syrian Arab Airlines; and commodity marketing bodies for cotton and tobacco.
These changes reduce the “no-touch” problem around payments and contracting in sectors where the state is hard to avoid—fuel supply chains, telecom maintenance, and transport links. They do not, on their own, unlock large-scale trade or investment. Overcompliance and de-risking remain the primary constraints, as banks, insurers, and suppliers often continue to treat Syria-linked transactions as high risk even when regulations permit the activity, given the persistence of targeted sanctions and other US restrictions affecting Syria. Canada’s new listing criteria and six new designations seek to maintain pressure on perpetrators of sectarian violence and financiers of weapons of mass destruction while allowing limited economic activity to resume.
Saudi-Syrian Deals Test Whether Sanctions Rollback Has Reopened Payment Rails
Saudi Arabia announced a major investment package in Syria on 7 February, covering energy, aviation, real estate, and telecommunications. Riyadh launched a dedicated investment fund that will commit SAR 7.5 billion (USD 2 billion) to the phased development of two airports in Aleppo. The fund aims to finance large-scale projects across Syria with the participation of Saudi private-sector investors.
In civil aviation, Saudi budget carrier Flynas signed an agreement with the Syrian Civil Aviation Authority to establish a new airline, Flynas Syria. The joint venture will be 51 percent Syrian-owned and 49 percent owned by Flynas, with operations expected to begin in the fourth quarter of 2026. Saudi Arabia’s largest telecommunications operator, STC, will also invest more than SAR 3 billion (USD 800 million) to strengthen Syria’s telecommunications infrastructure and connect the country regionally and internationally through a fiber-optic network extending more than 4,500 kilometers.
CONTEXT AND ANALYSIS: These investments represent the largest such announcement since the US repealed the Caesar Act in December 2025. Saudi Arabia has supported President Ahmad al-Sharaa since he came to power in late 2024, following the ouster of Bashar al-Assad by HTS.
The agreements signed in Damascus earlier in February matter less for the individual projects they list than for what they imply about the reactivation of cross-border financial channels into Syria. In post-conflict settings, large capital commitments translate into implementation only when investors and contractors can move funds through predictable payment corridors, access correspondent banking, and rely on risk-management frameworks that financial institutions consider credible.
The core issue is whether Syria’s payment systems and correspondent banking relationships are reopening in a way that genuinely supports sustained private-sector activity. Formal sanctions relief alone is not enough. For the Saudi fund and related projects to function, banks will need practical assurances: transparent beneficial ownership, reliable screening and compliance procedures, credible regulatory oversight, and transaction structures that allow them to manage counterparty and terrorism-financing risks.
The 2025 Saudi-Syrian investment protection treaty may reduce political and legal risk for investors, but it does not change how banks assess financial crime exposure. Ultimately, the success of the Saudi package will depend on whether it can establish payment and financing channels that withstand enhanced due diligence and allow funds to move into and within Syria under safeguards that financial institutions consider credible.