Lawmakers urge Commerce Dept to ease Syria investment restrictions

WASHINGTON — More than two months after the Trump administration took Syria off the US terrorism blacklist, it remains subject to export controls that key lawmakers say are hindering American investment in the war-torn country. 

When Secretary of State Marco Rubio formally rescinded Syria’s State Sponsor of Terrorism designation on Aug. 24, he called it another “historic step” toward helping the Syrian people prosper after nearly 14 years of civil war left their country in ruins, one that would eliminate "the final major barriers for private sector investment in Syria."

A consequence of Syria being labeled a State Sponsor of Terrorism is it was placed in the Commerce Department’s highly restrictive E:1 export-control category. That classification for terrorism-supporting countries limits exports of certain American goods, technology and software, including American products with dual-use applications as well as foreign-made goods containing more than 10% US-origin content.

Although the Commerce Department eased restrictions on many civilian exports to Syria in September 2025, it still lists the country in the E:1 category alongside Iran and North Korea, requiring American companies to obtain licenses from the department for restricted exports. Experts say the often months-long licensing process has deterred investors already wary of the country’s long-term commercial prospects.

“It's directly impacting our efforts to help rebuild the country and alleviate the suffering,” said Mohammed Alaa Ghanem, chief policy adviser at the Syrian American Council advocacy group. “When you have unnecessary licensing burdens, that increases costs, creates delays and impedes Syria’s reintegration into the global economy.” 

Sameer Saboungi, deputy director at the US-Syria Business Council, said Syria's E:1 listing also has a reputational consequence.

"Being listed alongside North Korea and Iran feeds overcompliance by banks and compliance departments in companies," Saboungi said. "It sends the signal that normalization hasn’t been fully effected with Syria, so there’s a reason to pause and move slowly."

The Commerce Department did not return an Al-Monitor request for comment. Speaking on condition of anonymity, several US officials familiar with the delay offered differing explanations, including that the department's Bureau of Industry and Security is understaffed after last year's federal workforce cuts and has given other foreign policy issues higher priority than Syria.

Yet Commerce officials had ample notice that they would have to remove Syria from the E:1 list. President Donald Trump laid the groundwork for rescinding Syria’s State Sponsor of Terrorism designation in a June 2025 executive order, when he directed Rubio to review the label. The eventual delisting in August 2026 was widely expected, in line with Trump's pledge to lift all US sanctions on Syria.  

Sen. Elizabeth Warren (D-Mass.), the ranking member of the Senate Banking Committee — the panel with jurisdiction over BIS — told Al-Monitor in a recent statement that she welcomed the Trump administration’s efforts to give the Syrian people “a fighting chance to rebuild.”

“But the work is far from done,” Warren said. “The Commerce Department must stop dragging its feet in removing outdated barriers to help US businesses and other partners contribute to Syria’s reconstruction and recovery.” 

BIS’ process to remove Syria from the E:1 category has taken far longer than the State Department expected, according to US officials, continuing more than two months after State removed Syria from its terrorism blacklist. In comparison, the bureau removed Sudan from the E:1 list one month after the first Trump administration lifted its State Sponsor of Terrorism designation in 2020.

“The main issue is this disconnect between the administration's stated Syria policy and BIS failing to align their regulations with it,” said Ghanem, whose organization is working with lawmakers from both parties to expedite the process.

Reconstruction meets red tape

The stakes could not be higher for Syria nearly two years after Ahmed al-Sharaa, commander of a former al-Qaeda affiliate in the country's northwest, led a rebel insurgency that toppled the Assad regime and cleared the way for millions of refugees to return home. The country’s post-war future hinges in part on whether Sharaa, now president, can successfully turn billions of dollars in pledges into visible progress on the ground. The price tag is staggering: The World Bank’s conservative estimate puts the cost of rebuilding Syria at $216 billion.

In Washington, members of Congress on both sides of the aisle who pushed for Syria’s delisting as a State Sponsor of Terrorism say the Commerce Department is standing in the way of attracting that foreign investment.

Rep. Joe Wilson (R-S.C.), who recently met with top BIS official Jeffrey Kessler on Syria, raised concerns that the regulatory burdens on American companies could allow competing Chinese vendors to fill the void.

“The longer Syria stays on this outdated BIS list for terrorism supporting nations, list E, the longer American companies have to wait to export our technology products to Syria. This will drive Syria to China,” Wilson said in a statement to Al-Monitor. “I am confident that things are moving in the right direction, but I hope it can be done as fast as possible to give Syria a chance and give our companies an opportunity.” 

Chinese companies, including telecom giant Huawei Technologies, are carving out a role inside Syria’s reconstruction economy. In August 2026, China exported $175 million worth of goods to Syria — up roughly 170% from $65 million in August 2025, according to data from the Observatory of Economic Complexity online platform.

Along with Wilson, Sen. Jeanne Shaheen (D-N.H.) spearheaded the bipartisan push in December 2025 to repeal the Assad-era Caesar Act, a sweeping law that authorized sanctions on anyone supporting Syria’s military or doing business with the government. Shaheen, who is the top Democrat on the Senate Foreign Relations Committee, said sanctions relief alone will not unlock much-needed investment. American companies and the US International Development Finance Corporation — an agency set up in Trump’s first term to finance foreign projects that serve the US national interest — must have “the tools they need to successfully operate in Syria.” 

“I will continue to push for investment barriers to be removed,” Shaheen told Al-Monitor. “After decades of dictatorship and civil war, Syrians deserve the chance to build a secure and prosperous future.”