January 16, 2017

US Lifts Sanctions on Sudan

On January 13, 2017, the US Treasury Department announced that a new general license will authorize all transactions prohibited by the Sudanese Sanctions Regulations (SSR) and related presidential executive orders (the New License).

In concise, sweeping language, the New License provides:

All transactions prohibited by this part and Executive Orders 13067 and 13412 [i.e., the SSR and the related executive orders], including all transactions that involve property in which the Government of Sudan has an interest, are authorized.

The New License will become effective on January 17, 2017, just days before Donald J. Trump takes office as US president, and will be codified in section 538.540 of the SSR.

A related Treasury Department press release notes that under the New License:

  • All property and interests in property blocked pursuant to the SSR will be unblocked.

  • All trade between the United States and Sudan that was previously prohibited by the SSR will be authorized.

  • All transactions by U.S. persons relating to the petroleum or petrochemical industries in Sudan that were previously prohibited by the SSR will be authorized, including oilfield services and oil and gas pipelines.

  • U.S. persons will no longer be prohibited from facilitating transactions between Sudan and third countries, to the extent previously prohibited by the SSR.

The Treasury Department’s announcement was made in conjunction with President Obama’s issuance of an executive order that, conditionally, will essentially provide for full revocation of US-Sudan sanctions (the Executive Order). The Executive Order was issued based upon actions taken by the Sudanese government, including:

a marked reduction in offensive military activity, culminating in a pledge to maintain a cessation of hostilities in conflict areas in Sudan, and steps toward the improvement of humanitarian access throughout Sudan, as well as cooperation with the United States on addressing regional conflicts and the threat of terrorism.

The revocation of US-Sudan sanctions is to become effective on July 12, 2017, provided that State Department publishes a report stating that the government of Sudan has sustained the positive actions that gave rise to the Executive Order.

Despite the New License, it should be noted that:

  • Exports and reexports to Sudan of US agricultural commodities, medicines and medical devices must still be shipped within twelve months of entering into the export/reexport agreement;

  • The US Commerce Department’s broad controls on exports and reexports of other US goods to Sudan remain in effect; and

  • Individuals and entities blocked under US-Darfur sanctions program, of which there are currently eight, will remain blocked.

For nearly a decade, the US has maintained an extensive embargo on Sudan, similar to the embargos on Iran, Cuba, Syria and North Korea. The dramatic changes announced on January 13 stand in sharp contrast to the Obama Administration’s incremental easing of sanctions under the Iran and Cuba programs. Whether the incoming Trump Administration will support these changes remains to be seen.