by Jeremy Paner
Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control announced an upcoming General License that will authorize transactions involving Sudan. Current U.S. sanctions regulations form a broad trade embargo that generally prohibits U.S. companies from dealings with Sudan. On Tuesday, January 17, OFAC will issue a General License that will effectively lift the embargo and unblock the Government of Sudan property currently held by U.S. companies and financial institutions. Parties looking for business opportunities involving Sudan should be aware of the remaining restrictions under the state sponsor of terrorism designation and targeted sanctions, in addition to the recordkeeping requirements and potential revocation of this authorization.
State Sponsor of Terrorism List
Sudan remains designated as a state sponsor of terrorism, under section 6(j) of the Export Administration Act (‘‘EAA’’) of 1979. Section 321 of the Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA), Public Law 104–132, makes it a criminal offense for U.S. persons, except as provided in regulations issued by the Secretary of the Treasury, to knowingly engage in financial transactions with the government of any country designated under section 6(j) of the EAA as supporting international terrorism. The General License announced today will authorize U.S. individuals and companies to engage in financial transactions with the Government of Sudan, so this sanction will not restrict U.S. banks from providing financial services.
Other significant sanctions on Sudan resulting from its designation as a state sponsor of terrorism remain. These include prohibitions on U.S. foreign assistance, a ban on defense exports and sales, controls on exports of dual-use items, and a requirement for the U.S. government to actively oppose World Bank and International Monetary Fund loans.
Recordkeeping Requirements and Potential Revocation
It is important to note that OFAC did not preview a complete lifting of its Sudan sanctions. U.S. individuals and companies will remain prohibited from dealings with Sudan, but as of January 17, those dealings will be authorized by a General License. U.S. persons who use this authorization must therefore comply with OFAC’s recordkeeping requirements, by keeping a “full and accurate record” of its Sudan-related transactions for a minimum of 5 years. (31 C.F.R. § 501.601) The authorization may also be amended, modified, or revoked at any time. (31 C.F.R. § 501.803)
We will continue to monitor changes to the Sudanese Sanctions Regulations and issue updates as significant events occur.