On October 31, 2007, the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of the Treasury amended the Sudanese Sanctions Regulations (“SSR”), 31 C.F.R. Part 538 to clarify the transactions involving Sudan and the areas in Sudan that remain subject to U.S. sanctions. In October 2006, President Bush lifted sanctions against troubled southern regions of Sudan suffering humanitarian crises. See Executive Order 13412 of October 13, 2006. But implementation of those changes has been handicapped by the lack of published regulations, especially the definition of key terms.
U.S. persons may now import Sudanese goods or export U.S. goods to Sudan if all of the following conditions apply:
- Such trade involves non-sanctioned regions of Sudan (defined as Southern Sudan, Southern Kordofan/Nuba Mountains State, Blue Nile State, Abyei, Darfur, or four refugee camps near Khartoum – Mayo, El Salaam, Wad El Bashir, and Soba), but not other parts of Sudan; OFAC license may still be required;
- Such trade does not involve the export of U.S. bulk agricultural products, medicine or medical devices, for which an OFAC license may still be required;
- The transaction does not involve the Sudanese petroleum industry; and
- Any Sudanese governmental entity involved in the trade is part of the regional government of Southern Sudan only.
Further, since 1997, the SSR have required U.S. financial institutions to freeze any property in their possession in which the Government of Sudan had an interest. This requirement persists, except that U.S. persons need not block the property or reject the transactions of the regional government of Southern Sudan. Complications may easily arise, however, as transactions involving non-sanctioned Sudanese entities become sanctioned if any of the following applies:
- The transaction is routed through a sanctioned area of Sudan;
- The transaction is routed through a bank controlled by the sanctioned Government of Sudan (wherever such a bank might be); or
- An underlying transaction itself violates the SSR.
Finally, the amendments make clear that U.S. persons may not engage in any transaction involving the Sudanese petroleum industry, including oilfield services and pipelines. This prohibition extends even to deals exclusively involving the (otherwise) non-sanctioned regions of Sudan and regional government of Southern Sudan.