Last month, President Trump extended the suspension of the Sudanese embargo, the relaxation of which was first implemented by then-President Obama in January 2017. From 1997 until January 2017, U.S. sanctions regulations formed a broad trade embargo that generally prohibited U.S. companies from dealings with Sudan. The twenty-year embargo also affected the business operations of many non-U.S. companies, and violators have paid hundreds-of-millions of dollars in civil and criminal penalties.
Both U.S. and non-U.S. 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 expiration or revocation of this authorization. The most recent extension of the suspension will expire on October 12, 2017, unless the President either renews the operative General License, terminates the Sudan sanctions program, or revokes the General License and reinstates the comprehensive sanctions program.
State Sponsor of Terrorism List
Sudan remains designated by the United States 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 first announced in January and extended to October 12, 2017, authorizes 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 to U.S. or non-U.S. companies.
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 the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has not lifted its Sudan sanctions. U.S. individuals and companies remain prohibited from dealings with Sudan, but as of January 17, 2017, those dealings have been 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)