Effective October 12, 2017, the U.S. Government has revoked its sanctions against Sudan that were established in Executive Orders 13067 and 13412 and removed a number of Sudanese entities from the SDN List. The revocation makes official the sanctions relief contemplated in Executive Order 13761, issued in January 2017. The effective date of Executive Order 13671 was extended from July 12, 2017, to October 12, 2017, by Executive Order 13804 issued in July of this year.
All transactions prohibited by Executive Orders 13067 and 13412 are now authorized under Executive Orders 13761 and 13804. Moreover, entities designated under those earlier orders have been removed from the list of Specially Designated Nationals and Blocked Persons (the “SDN List”), and OFAC, on October 12, 2017, released a list of all such designated persons removed from the SDN List. Finally, all property of the Government of Sudan is unblocked under these last two executive orders.
The practical effect of the government’s latest action is somewhat limited. When Executive Order 13067 was promulgated, OFAC issued a general license, found in section 538.540 of the Sudanese Sanctions Regulations (“SSR”), which permitted all of the activities described in the preceding paragraph.
OFAC has not formally revoked the SSR, which technically remain in effect and part of the Code of Federal Regulations (“C.F.R.”). The FAQs issued by OFAC indicate that “OFAC expects to remove the SSR from the C.F.R.” but no date for removal is specified. Of course, to the extent that the SSR remain in effect while still published in the C.F.R., the general license in section 538.540 of the SSR, which permits all transactions prohibited by all other sections of the SSR, also remains in effect until the SSR are finally removed.
Although the economic sanctions against Sudan in Executive Orders 13067 and 13412 have been revoked, certain other restrictions and sanctions will continue to apply to dealings with Sudan. In particular, companies in the agricultural, pharmaceutical, or medical device sectors should be aware that licensing requirements remain for exports and re-exports of their products to Sudan. Other restrictions and requirements also continue to apply following the revocation of the sanctions.
Licenses continue to be required under TSRA for exports and reexports of agricultural commodities, medicine, and medical devices to Sudan.
Because Sudan remains designated as a state sponsor of terrorism, the provisions of section 7205 of the Trade Sanctions Reform and Export Enhancement Act of 2000 (“TSRA”), which requires licenses for all exports of agricultural commodities, medicine and medical devices to state sponsors of terrorism will continue to apply. Under the SSR there was a general license for exports of food to Sudan, with other agricultural commodities, medicine and medical devices requiring a specific license. The general license in section 538.540, adopted in January 2017, permitted exports not just of food, but of all agricultural commodities, medicines and medical devices, provided they were exported pursuant to a written contract and within one year of the date of the signing of that contract. That general license in section 538.540, which will presumably be revoked at some point, has now been continued through the issuance of a new general license entitled “General License A Authorizing Certain Transactions Pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA).”
Companies in the agricultural, pharmaceutical, or medical device industries who wish to engage or continue such activities must ensure that they comply with all terms and conditions of General License A and that General License A is appropriately reflected on documentation related to the transaction.
Licensing requirements under U.S. export control regulations are unaffected.
The revocation of the sanctions does not affect licensing requirements administered by the Bureau of Industry and Security under the Export Administration Regulations. Currently most items having an ECCN other than EAR99 and items listed in Supplement 2 to Part 742 (including some EAR99 items listed therein) require licenses to Sudan and that will continue to be the case.
The arms embargo against Sudan described in section 126.1 of the ITAR remains in place and will continue to prohibit the export of all items on the USML to Sudan.
Companies involved in exports, re-exports and transfers of items subject to U.S. export controls should ensure that they know the jurisdiction and classification of the items to be exported or re-exported to Sudan and obtain all required export authorizations.
Dealings with persons and entities on the SDN List remain restricted.
Although OFAC removed a number of Sudanese entities from the SDN list on October 12, 2017, a number of Sudanese persons and entities remain on the SDN List. SDN designations under the Darfur-related sanctions and the South Sudanese sanctions remain in place. Companies should continue to exercise diligence to ensure that they understand all aspects of a proposed transaction involving Sudan, including the identity of all parties involved in the transaction.
Although the U.S. sanctions against Sudan have been revoked, some potential compliance traps remain. Persons wishing to engage in business in or with Sudan should be mindful of such considerations when proceeding with business opportunities there.