Activities and transactions that would otherwise be prohibited under the Sudanese Sanctions Regulations, 31 C.F.R. Pt. 538 (SSR), are now authorized under a new general license established by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) on Jan. 17. The amendment of the SSR follows the issuance of an executive order on Jan. 13 in which President Barack Obama announced that as a result of ongoing bilateral engagement between the United States and Sudan and “positive developments in the country over the past six months related to bilateral cooperation, the ending of internal hostilities, regional cooperation, and improvements to humanitarian access,” he has concluded that the situation that gave rise to the U.S. embargo against Sudan almost 20 years ago has changed.
Under the terms of the executive order, if Sudan sustains these positive developments for six months, effective July 12, the terms of two earlier executive orders that established the embargo against Sudan, sections 1 and 2 of Executive Order 13067 of Nov. 3, 1997, and the entirety of Executive Order 13412 of Oct. 13, 2006, will be revoked. That means that the incoming Trump administration will be responsible for making that determination, based on a report to be prepared by the secretary of state, in consultation with the secretary of the treasury, the director of national intelligence, and the administrator of the Agency for International Development. The executive order directs that the report assess the Government of Sudan’s progress in carrying out a pledge to maintain the cessation of hostilities in conflict areas in Sudan, continuing improvement in humanitarian access throughout Sudan and maintaining cooperation with the United States in addressing regional conflicts and the threat of terrorism.
Under the new general license, at 31 C.F.R. § 538.540, U.S. persons are authorized to process transactions involving persons in Sudan, to engage in imports to and exports from Sudan that were previously prohibited under the SSR and to engage in transactions involving the Government of Sudan. All property blocked under the SSR is now unblocked, trade between the United States and Sudan is now permitted and transactions by U.S. persons involving Sudan — including transactions involving Sudan’s petroleum and petrochemical industries — are now authorized. Because of its breadth, general license 538.540 supersedes existing specific and general licenses currently used to authorize activity in Sudan.
General license 538.540 does not, however, remove all regulations limiting transactions with Sudan. For example, consistent with the requirements of the Trade Sanctions Reform and Export Enhancement Act (TSRA), even though no license is required, exports and re-exports of agricultural commodities, medicine or medical devices to Sudan must still ship within a year of the contract for export or re-export. U.S. persons also must continue to maintain records of all authorized transactions for at least five years and must continue to comply with other applicable sanctions regimes regarding, for example, Darfur, the proliferation of weapons of mass destruction, terrorism and narco-trafficking.
In addition, U.S. export controls against Sudan remain intact, although the Commerce Department Bureau of Industry and Security (BIS) has announced some revisions to its Sudan Licensing Policy. Specifically, the U.S. maintains an arms embargo against Sudan and strictly controls the transfer of controlled dual-use items to Sudan. However, BIS will review applications for licenses to export or re-export to Sudan certain items intended to ensure the safety of civil aviation or the safe operation of fixed-wing, commercial passenger aircraft and applications for licenses to export or re-export to Sudan certain items for use to inspect, design, construct, operate, improve, maintain, repair, overhaul or refurbish railroads in Sudan under a general policy of approval rather than a general policy of denial.