OFAC Amends the Sudanese Sanctions Regulations
On January 17, 2017, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) published a final rule in the Federal Register to amend the Sudanese Sanctions Regulations (SSR), authorizing transactions that were previously prohibited by the SSR and by Executive Orders 13067 and 13412. As a result, newly authorized transactions include: “(i) the processing of transactions involving persons in Sudan; (ii) the importation of goods and services from Sudan; (iii) the exportation of goods, technology, and services to Sudan; and (iv) transactions involving property in which the Government of Sudan has an interest.” These changes are the result of ongoing engagement between the United States and the Government of Sudan, as well as the Government of Sudan’s cooperation and efforts to reduce offensive military activity in Darfur. Focus has been on: resolving the ongoing conflict in South Sudan and to cease any activity to undermine South Sudan’s stability; to improve humanitarian access throughout Sudan, and to cooperate with the United States on counterterrorism and addressing regional conflicts. OFAC implemented this rule as a general license and added it as a new regulatory amendment at section 538.523 of the SSR.
BIS Makes Revisions to Sudan Licensing Policy
In conjunction with OFAC’s new rule, the Department of Commerce’s Bureau of Industry and Security (BIS) also published a final rule in the Federal Register on January 17, 2017. Prior to these changes, the Export Administration Regulations (EAR) imposed a general policy of denial on license applications to export or re-export to Sudan all aircraft controlled on the Commerce Control List (CCL), and to export related parts and components that are controlled on the CCL. The new BIS rule revised the licensing policy to “a general policy of approval for parts, components, materials, equipment, and technology that are controlled on the CCL only for anti-terrorism (AT) reasons and that are intended to ensure the safety of civil aviation or the safe operation of fixed-wing, commercial passenger aircraft.” BIS stated, however, that applications to export or re-export to Sudan aircraft-related items controlled for AT reasons and other additional reasons (e.g., missile technology) will continue to be reviewed under a general policy of denial to all end-users. BIS also revised “the review policy from a general policy of denial to a general policy of approval for license applications to export or re-export to Sudan items controlled on the CCL only for AT reasons that will be used to inspect, design, contrast, operate, improve, maintain, repair, overhaul, or refurbish railroads in Sudan.” BIS revised section 742.10 of the EAR in order to implement these new general policies of approval for license applications to export or re-export to Sudan.
For both aircraft related-items and railroad related-items, the new general policies of approval described in this rule only apply to exports and re-exports to Sudan for civil uses by non-sensitive end-users within Sudan. Sensitive end users are not eligible for the new policies and are defined as “Sudan’s military, police, and/or intelligence services and persons that are owned by or are part of or are operated or controlled by those services.” Export or re-export license applications that substantially benefit such sensitive end users will also be denied.