STATE SPONSOR: IMPLICATIONS

Designating countries that repeatedly provide support for acts of international terrorism as state sponsors of terrorism imposes four main sets of U.S. Government sanctions:

1. A ban on arms-related exports and sales.
2. Controls over exports of dual-use items, requiring 30-day Congressional notification for goods or services that could significantly enhance the terrorist-list country's military capability or ability to support terrorism.
3. Prohibitions on economic assistance.
4. Imposition of miscellaneous financial and other restrictions, including:

• Requiring the United States to oppose loans by the World Bank and other international financial institutions;
• Exception from the jurisdictional immunity in U.S. courts of state sponsor countries, and all former state sponsor countries (with the exception of Iraq), with respect to claims for money damages for personal injury or death caused by certain acts of terrorism, torture, or extrajudicial killing, or the provision of material support or resources for such acts;
• Denying companies and individuals tax credits for income earned in terrorist-list countries;
• Denial of duty-free treatment of goods exported to the United States;
• Authority to prohibit any U.S. citizen from engaging in a financial transaction with a terrorist-list government without a Treasury Department license; and
• Prohibition of Defense Department contracts above $100,000 with companies in which a state sponsor government owns or controls a significant interest.

CUBA

The Government of Cuba remained opposed to U.S. counterterrorism policy, and actively and publicly condemned many associated U.S. policies and actions. To U.S. knowledge, the Cuban government did not attempt to track, block, or seize terrorist assets, although the authority to do so is contained in Cuba’s Law 93 Against Acts of Terrorism, as well as Instruction 19 of the Superintendent of the Cuban Central Bank. No new counterterrorism laws were enacted, nor were any executive orders or regulations issued in this regard. The Government of Cuba provided safe haven to members of ETA, the FARC, and the ELN. It maintained close relationships with other state sponsors of terrorism such as Iran and Syria.

The Cuban government continued to permit more than 70 U.S. fugitives to live legally in Cuba and refused almost all U.S. requests for their return. These U.S. fugitives include convicted murderers (two of them killed police officers) as well as numerous hijackers, most of whom entered Cuba in the 1970s. The government returned one American citizen fugitive when that person sailed his boat into Cuban waters and it was determined that he was wanted on fraud charges in the state of Utah. The Cuban government stated in 2006 that it would no longer provide safe haven to new U.S. fugitives entering Cuba.

The Cuban government did not extradite suspected terrorists during the year.

IRAN

Iran remained the most active state sponsor of terrorism. Elements of its Islamic Revolutionary Guard Corps (IRGC) were directly involved in the planning and support of terrorist acts throughout the region and continued to support a variety of groups in their use of terrorism to advance their common regional goals. Iran provides aid to Palestinian terrorist groups, Lebanese Hizballah, Iraq-based militants, and Taliban fighters in Afghanistan.

Iran remains a threat to regional stability and U.S. interests in the Middle East because of its continued support for violent groups, such as HAMAS and Hizballah, and its efforts to undercut the democratic process in Lebanon, where it seeks to build Iran’s and Hizballah’s influence to the detriment of other Lebanese communities.

Iran is a principal supporter of groups that are implacably opposed to the Middle East Peace Process, and continues to maintain a high-profile role in encouraging anti-Israel terrorist activity – rhetorically, operationally, and financially. Supreme Leader Khamenei and President Ahmadinejad praised Palestinian terrorist operations, and Iran provided Lebanese Hizballah and Palestinian terrorist groups, notably HAMAS, Palestinian Islamic Jihad, the al-Aqsa Martyrs Brigades, and the Popular Front for the Liberation of Palestine-General Command, with extensive funding, training, and weapons.

Despite its pledge to support the stabilization of Iraq, Iranian authorities continued to provide lethal support, including weapons, training, funding, and guidance, to some Iraqi militant groups that target Coalition and Iraqi security forces and Iraqi civilians. In this way, Iranian government forces have been responsible for attacks on Coalition forces. The Islamic Revolutionary Guard Corps (IRGC)-Qods Force, continued to provide Iraqi militants with Iranian-produced advanced rockets, sniper rifles, automatic weapons, mortars that have killed thousands of Coalition and Iraqi Forces, and explosively formed projectiles (EFPs) that have a higher lethality rate than other types of improvised explosive devices (IEDs), and are specially designed to defeat armored vehicles used by Coalition Forces. The Qods Force, in concert with Lebanese Hizballah, provided training outside Iraq for Iraqi militants in the construction and use of sophisticated IED technology and other advanced weaponry. These individuals then passed on this training to additional militants inside Iraq, a “train-the-trainer” program. In addition, the Qods Force and Hizballah have also provided training inside Iraq. In fact, Coalition Forces captured a Lebanese Hizballah operative in Iraq in 2007.

Iran’s IRGC-Qods Force continued to provide weapons and financial aid to the Taliban to support anti-U.S. and anti-Coalition activity in Afghanistan. Since 2006, Iran has arranged a number of shipments of small arms and associated ammunition, rocket propelled grenades, mortar rounds, 107mm rockets, and plastic explosives, possibly including man-portable air defense systems (MANPADs), to the Taliban.

Iran remained unwilling to bring to justice senior al-Qa’ida (AQ) members it has detained, and has refused to publicly identify those senior members in its custody. Iran has repeatedly resisted numerous calls to transfer custody of its AQ detainees to their countries of origin or third countries for interrogation or trial. Iran also continued to fail to control the activities of some AQ members who fled to Iran following the fall of the Taliban regime in Afghanistan.

NORTH KOREA

The Democratic People's Republic of Korea (DPRK) was not known to have sponsored any terrorist acts since the bombing of a Korean Airlines flight in 1987. The DPRK continued to harbor four Japanese Red Army members who participated in a jet hijacking in 1970. The Japanese government continued to seek a full accounting of the fate of the 12 Japanese nationals believed to have been abducted by DPRK state entities; five such abductees have been repatriated to Japan since 2002. As part of the Six-Party Talks process, the United States reaffirmed its intent to fulfill its commitments regarding the removal of the designation of the DPRK as a state sponsor of terrorism in parallel with the DPRK’s actions on denuclearization and in accordance with criteria set forth in U.S. law.

SUDAN

During the past year, the Sudanese government continued to cooperate in the War on Terror, pursuing terrorist operations directly involving threats to U.S. interests and personnel in Sudan. While the U.S.-Sudanese counterterrorism relationship remained solid, hard-line Sudanese officials continued to express resentment and distrust over actions by the USG and questioned the benefits of continued cooperation. Their assessment reflected disappointment that Sudan’s counterterrorism cooperation has not warranted rescission of its designation as a state sponsor of terrorism.

AQ-inspired terrorist elements, elements of Palestinian Islamic Jihad (PIJ), HAMAS, and the Lord’s Resistance Army (LRA), remained in Sudan. In light of the ongoing hybrid United Nations-African Union deployment to Darfur, various terrorist threats against these forces emerged, and AQ leadership has called for jihad against UN forces in Darfur. Further, Sudanese authorities uncovered and largely dismantled a large-scale terrorist organization targeting western interests in Khartoum in summer and fall of the year. The terrorist threat level remained high in Khartoum and Darfur, and potentially other parts of Sudan.

With the exception of HAMAS, the Sudanese government does not appear to openly support the presence of terrorist groups in Sudan. The Sudanese government has taken steps to limit the activities of these organizations. As an example, Sudanese officials have welcomed HAMAS members as representatives of the Palestinian Authority (PA), but have limited their activities to fundraising. The Sudanese government has also worked hard to disrupt foreign fighters from using Sudan as a logistics base and transit point for extremists going to Iraq.

The LRA, led by Joseph Kony, continued to operate from its base in the Democratic Republic of the Congo (DRC) and threatened the tri-border area (DRC, Sudan, and Uganda). The Government of Southern Sudan worked to mediate peace between the LRA and neighboring countries and has vowed to eliminate the presence of the LRA as an organization in Southern Sudan. The Sudanese People’s Liberation Army made some progress in containing LRA activity. Negotiations between the LRA and the Ugandan People’s Defense Forces (UPDF) continued, with occasional interruptions in Juba under the mediation of the Government of Southern Sudan.

SYRIA

Since Syria’s 1979 designation as a state sponsor of terrorism, it has continued to provide political support to Palestinian terrorist groups. Syria has also continued to provide political and material support to Hizballah since that group's creation. HAMAS, Palestinian Islamic Jihad (PIJ), the Popular Front for the Liberation of Palestine (PLFP), and the Popular Front for the Liberation of Palestine-General Command (PFLP-GC), among others, all have offices in Damascus and operate within Syria's borders. The Syrian government insisted that the Damascus-based groups are confined to political and informational activities, but Palestinian groups with leaders in Syria have claimed responsibility for anti-Israeli terrorist attacks.

As in 2006, President Bashar al-Asad expressed public support for Palestinian terrorist groups. HAMAS Politburo head Khalid Mishal and his deputies continued to reside in Syria, and the Syrian government provided security escorts for their motorcades. Additionally, Mishal led Friday prayers at various mosques throughout Syria and gave several public speeches expressing gratitude for Syria's support.

The regime in Damascus continued to undermine Lebanon’s sovereignty and security through its proxies. Although Syrian officials publicly condemned some acts of international terrorism, including bombing attacks that killed Lebanese government officials, it made a distinction between what it considered to be legitimate armed resistance by Palestinians in the occupied territories.

The Syrian government has not been implicated directly in an act of terrorism since 1986, although an ongoing UN investigation into the February 2005 assassination of former Lebanese Prime Minister Rafiq Hariri continued to examine Syrian involvement. The Syrian regime, Hizballah, and pro-Syrian opposition elements in Lebanon have attempted to stymie international efforts to bring to justice those responsible for the Hariri assassination, as well as efforts to disarm militia groups that constitute a challenge to Lebanese security and sovereignty.

Separately, four Syrian members of Fatah al-Islam were arrested in connection with the February 13 Ain Alaq bus bombings in Lebanon. In March, Syrian Interior Minister, Major General Bassam Abdul Majeed, spoke publicly on the matter and rejected suggestions that the Syrian regime was involved in the attack. Syrian-linked groups were involved in several attacks outside of the country in 2007, including a rocket-propelled grenade attack in Lebanon. Lebanese authorities also blame Syria for complicity in a September improvised explosive device (IED) attack that killed a member of the Lebanese parliament.

Syria continued to strengthen its ties with Iran, another state sponsor of terrorism. Iranian President Ahmadinejad, accompanied by the Iranian Defense Minister and the Iranian Army Chief of Staff, met with Syrian President al-Asad and other senior Syrian officials in July. During this visit, Ahmadinejad also met with Palestinian terrorist groups, including two separate meetings with the leaders of HAMAS and PIJ and a collective meeting with leaders of PFLP, PFLP-GC, Democratic Front for the Liberation of Palestine (DFLP), and Fatah al-Intifada. Additionally, local media reported that Hizballah leader Nasrallah met with Ahmadinejad at the Iranian Embassy in Damascus. Syria and Iran worked successfully to rearm Hizballah after the July-August 2006 conflict between Hizballah and Israel.

Although the Syrian government suspended intelligence cooperation with the United States and several foreign governments in 2004, Damascus has taken some action against AQ-linked groups and individuals in 2007. Additionally, the Syrian government worked to increase security cooperation with Iraq. In July, Syria hosted a meeting of technical border security experts representing Iraq's neighbors, the United States, and other countries. Syria also participated in two ministerial-level Iraq Neighbors' Conferences in May and November, in Sharm el-Sheikh, Egypt, and Istanbul, respectively. In August, Syria hosted Iraqi Prime Minister Maliki and signed several security-related agreements. According to U.S. and Iraqi officials, 2007 witnessed a marked reduction in the flow of foreign terrorists transiting through Syria into Iraq.

Despite acknowledged reductions in foreign fighter flows, the scope of the problem remained large. According to the December "Measuring Stability and Security in Iraq" report to Congress, nearly 90 percent of all foreign terrorists known to be in Iraq had used Syria as an entry point. The Syrian government could do more to stop known terror networks and foreign fighter facilitators from operating within its borders. Separately, the Syrian government has cracked down on pro-Kongra-Gel/Kurdistan Worker’s Party (KGK/PKK) sympathizers in northeastern Syria, and President al-Asad expressed his public support of Turkish military action against KGK/PKK militants operating in southern Turkey and northern Iraq.

The Syrian government refused to implement mandatory visa requirements for citizens of Arab countries.

Syria remained a source of concern regarding terrorist financing. The Commercial Bank of Syria remained subject to U.S. sanctions. Industry experts reported that 70 percent of all business transactions were conducted in cash and only eight percent of all Syrians used formal banking services.