New Delhi, July 12 -- DAMASCUS - Ihab has run the same pastry shop in central Damascus for eleven years, through airstrikes, currency collapses, and the kind of endemic power cuts that made refrigeration a daily gamble. When told that Washington had begun the formal process of removing Syria from its state sponsors of terrorism list, he offered the verdict his neighbors have been giving for years. "God willing, it will improve things," he said.

even when other sanctions were suspended or lifted, the terrorism label kept global banks from processing Syrian transactions without extraordinary legal exposure. Money transfers from the Syrian diaspora typically run through Lebanon or Turkey. Websites from Netflix to Slack require VPNs to acces...