Update: OFAC revoked certain sanctions with respect to Sudan and the Government of Sudan on October 12, 2017. The SSR was removed from the C.F.R. Pursuant to the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA), an OFAC license is still required for certain exports and reexports to Sudan of agricultural commodities, medicine, and medical devices as a result of Sudan’s inclusion on the State Sponsors of Terrorism List (SST List). However, these exports and re-exports are generally licensed by OFAC.
In 1997, as a response to continued support for international terrorism, relentless efforts to destabilize neighboring governments, and human rights violations, the President of the United States issued Executive Order 13067, which established a trade embargo and blocked the Government of Sudan’s assets. In 2006, the United States imposed further sanctions on Sudan through Executive Order 13400 that were largely in response to persistent human rights and international humanitarian law violations in the Darfur region. Later that year, following the creation of a regional government in Southern Sudan, Executive Order 13412 exempted certain specified areas from certain prohibitions, as the new government was not taking part in the same activities that jeopardized human rights and the United States’ national security.
Sudan’s Humanitarian Crisis and OFAC Sanctions
The Office of Foreign Assets Control (OFAC) retains the responsibility for monitoring and enforcing economic sanctions against those who are involved with or do business with the Sudanese government. All businesses, individuals, non-profit organizations, and charities are subject to these restrictions and are bound to follow their terms. These prohibitions, while very specific and complex, are intended to protect the national security and foreign policy of the United States. Any individuals engaged in international business and commerce with Sudan must be aware of the possible civil and criminal penalties and other consequences that could result from intentionally and inadvertently violating the sanctions.
Breakdown of Sanctions and Prohibited Transactions with Sudan
The intention of the sanctions imposed against Sudan is to limit, or block, the Sudanese Government from lucrative business, thus motivating the country to address the concerns outlined in the Presidential Executive Orders targeting Sudan. These sanctions also specifically target Sudan’s sizable and lucrative oil industry. Prohibited transactions include:
- Importing Sudanese Goods;
- Exporting Sudanese Goods, technology, or services;
- Facilitating the exportation of goods;
- Extension of credits or loans;
- Transactions of cargo to or from Sudan;
- All transactions related to the petroleum and oil industries in Sudan.
Any individual, company, or organization, is subject to federal penalties for violating the terms of the sanctions against Sudan. It is, therefore, important to consult an attorney before engaging in any business transaction that has the potential of overstepping any of the boundaries established by the OFAC sanctions.
Status of Commerce with South Sudan
Since the popular referendum leading to South Sudan’s independence in 2011, the United States government has recognized the new state’s sovereignty and declared that South Sudan is no longer subjected to the Sudanese Sanctions Regulations. Instead, OFAC works to encourage U.S. investment and business with the Republic of South Sudan, and allows for the following:
- Export equipment for use in South Sudan’s oil industry;
- Transport through Sudan to get to South Sudan;
- Individuals and organizations are not required to have additional authorization from OFAC to take part in South Sudan’s oil industry.
However, it is imperative that all business transactions with respect to South Sudan be vetted and evaluated for due diligence purposes. Inadvertently working with SDNs, Sudan, or the Sudanese Government would still be prohibited even if the underlying transaction is intended for the benefit of South Sudan.
Information for Non-Government Organizations (NGOs) and International Organizations
For organizations involved in humanitarian or religious activities that are currently present in or seek a presence in non-specified areas of Sudan, additional licensing may be required in order to prevent sanctions violations. These organizations can apply for a specific license or registration through OFAC pursuant to 31 C.F.R. 538.521. Nevertheless, consulting with an attorney to file a license application and better understand the licensing process may be beneficial for anyone seeking to engage in humanitarian work in or near Sudan.
Possible Penalties for Violating Sanctions
If you have been notified of a possible investigation into Sudanese sanction violations (e.g., by administrative subpoena, or internal investigation), it is important to contact an OFAC sanctions attorney as soon as possible as the potential penalties are severe. Both monetary and criminal penalties can ensue, including criminal fines of up to $1 million and imprisonment of up to 20 years for anyone who willfully violates, attempts to violate, conspires to violate, or causes a violation of the Exec. Orders implementing the Sudan sanctions.
OFAC Sudan Sanctions Violations Consultant
In order to prevent violations and to ensure complete compliance with all existing sanctions, consult with an experienced attorney who can help explain the restrictions and regulations established by OFAC’s Sudan sanctions program. It is important to understand that U.S. sanctions programs are constantly influx due to the ever-evolving nature of American’s economic and foreign relations. Consulting an attorney who understands and follows the latest developments regarding OFAC sanctions programs related to Sudan and other areas across the globe is key for any business or group involved in international trade. In addition, for more information on OFAC’s latest actions regarding Sudan sanctions, visit our Resources page here.