Havana/Washington: The United States formally dropped Cuba from a list of state sponsors of terrorism on Friday, an important step toward restoring diplomatic ties but one that will have limited effect on removing U.S. sanctions on the Communist-ruled island.

President Barack Obama had announced on April 14 he would drop the former Cold War rival from the list, initiating a 45-day review period for Congress that expired on Friday.

Obama ordered a review of Cuba’s status on the terrorism list as part of a landmark policy shift on Dec. 17, when he and Cuban President Raul Castro announced they would seek to restore diplomatic relations that Washington severed in 1961, and work toward a broader normalization of ties.

Removal from the list is a step that has more symbolic than practical significance. It removes a prohibition on receiving U.S. economic aid, a ban on U.S. arms exports and controls on “dual-use” items with military and civilian applications.

But those bans remain in place under other, overlapping U.S. sanctions, since Cuba is still subject to a wider U.S. economic embargo that has been in place since the early 1960s.

“Rescinding of the ... designation against Cuba is an important step, however, as a practical matter, most restrictions related to exports and foreign aid will remain due to the comprehensive trade and arms embargo,” said a U.S. official who spoke on condition of anonymity.

Cuba had cited its designation as a state terrorism sponsor as an obstacle to the re-establishing of diplomatic relations and upgrading of their so-called interests sections in Havana and Washington into full-blown embassies.

The two sides have held four rounds of high level negotiations since December and say they are closing in on a deal to reopen the embassies. The State Department must give the U.S. Congress a 15-day notice before opening an embassy.

Washington put Cuba on its terrorism blacklist in 1982, when Havana supported armed guerrilla movements in Latin America. That support ended after the collapse of Cuba’s close trade and aid benefactor, the Soviet Union, in 1991. But Cuba remained on the list, placing onerous regulations on banks dealing with Havana and exposing them to U.S. fines.

Only Iran, Syria and Sudan remain on the U.S. list.

Wider Rapprochement

The December announcement by Obama and Castro sought to end decades of animosity between the United States and Cuba that followed the 1959 Cuban Revolution, when rebels led by Fidel and Raul Castro topped U.S.-backed dictator Fulgencio Batista. Relations soured quickly as Havana confiscated U.S. property and drew close to the Soviet Union.

Flashpoints included a failed U.S.-backed invasion of Cuba by Cuban exiles in 1961 and the basing of Soviet missiles on the island, only 90 miles (145 km) south of Florida, that nearly triggered a nuclear war in 1962.

Obama, a Democrat, has asked the Republican-controlled Congress to lift the 53-year-old U.S. economic embargo against Cuba, but the Republican leadership in Congress has resisted calls to remove what has been a pillar of U.S. foreign policy under nine presidents.

Congress also is considering an end to the U.S. travel ban. Obama has eased restrictions on Americans making authorized trips to Cuba, but general tourism to the Caribbean island remains illegal.

Two major obstacles to normal overall ties are the embargo and the U.S. naval base at Cuba’s Guantanamo Bay, which the United States has leased since 1903. Cuba wants the 45 square mile (116 square km) area returned as its full sovereign territory.

Raul Castro, 83, took over as president in 2008 after ill health forced his older brother Fidel, now 88, to step aside