State sponsors of terrorism provide critical support to many non-state terrorist groups. Without state sponsors, these groups would have greater difficulty obtaining the funds, weapons, materials, and secure areas they require to plan and conduct operations. The United States will continue to insist that these countries end the support they give to terrorist groups.

The designation of countries that repeatedly provide support for acts of international terrorism as state sponsors of terrorism carries with it four main sets of US 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 US 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 US 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.

http://www.state.gov/s/ct/rls/crt/2009/140889.htm