In the last few days of his Administration, President Obama and the U.S. Department of the Treasury’s Office of Foreign Asset Control (“OFAC”) took actions that, on at least a temporary basis, will authorize financial transactions with and most exports of goods and services to Sudan and the Sudanese Government. These actions take effect on Tuesday, January 17, but any U.S. persons seeking to trade with Sudan under the expanded authorizations should be aware that these new authorizations are subject to various conditions and could be revoked or modified based on future actions by the Government of Sudan and/or President-Elect Donald Trump’s incoming administration.
On January 13, 2017, President Obama issued an Executive Order recognizing the Government of Sudan’s positive actions during the past six months in reducing its military activity, improving humanitarian access throughout Sudan and cooperating with the US to address regional conflicts and terrorism. This Executive Order (“EO”) temporarily suspends certain Sudanese sanctions imposed under portions of previous EOs 13067 and 13412 and also directs the Secretary of State to issue a report within the next six months (and annually thereafter) in order to advise the President whether the Government of Sudan has continued these positive activities. Provided the next Secretary of State issues its approval and the EO is not subsequently repealed or modified, additional sanctions against Sudan imposed under separate portions of EOs 13067 and 13412 will be completely repealed effective July 12, 2017.
In connection with the recent EO, OFAC also announced amendments to its Sudanese Sanctions Regulations (“SSR”), which will create a new general license effective January 17, 2017 authorizing any transactions previously prohibited by the SSR and EOs 13067 and 13412. OFAC also provided additional guidance here, here and here). This general license will effectively authorize financial transactions with and exports of EAR99 goods and services to Sudan and the Government of Sudan by persons subject to US jurisdiction for as long as it remains in effect. The general license only applies to transactions, however, and the SSR and its other provisions will continue to remain in effect. For example, exporters to Sudan must continue to observe the SSR’s five-year recordkeeping requirement for any transactions conducted under this new general license. Although the general license will relieve the need to obtain a specific OFAC license for exports and reexports of agricultural commodities, medicine or medical devices to the Government of Sudan under the Trade Sanctions Reform and Export Enhancement Act of 2000 (“TSRA”), persons making such exports or reexports must still ship such goods within 12 months after signing their contract for such transactions. This general license will also be subject to revocation based on an annually recurring determination to be made by OFAC. Furthermore, the recent actions do not affect any of the US Department of Commerce’s Bureau of Industry and Security’s (“BIS”) sanctions against Sudan, so any exports of controlled items, technology or commodities to Sudan may be subject to further restriction.
The recent actions taken by the Administration are certainly very positive for future trade between the U.S. and Sudan; however, financial institutions and prospective exporters should continue to carefully monitor the Sudanese sanctions regulations carefully (particularly over the next six months).