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U.S. Moves to Lift Trade Embargo on Sudan

Monday, January 16, 2017
Sandler, Travis & Rosenberg Trade Report

The U.S. government has announced several measures to restore trade with Sudan in response to what it says are positive developments over the past six months related to bilateral cooperation, the ending of internal hostilities, regional cooperation, and improvements to humanitarian access.

General License. The Treasury Department’s Office of Foreign Assets Control has issued a final rule that, effective Jan. 17, will amend the Sudanese Sanctions Regulations to authorize all prohibited transactions under a general license.

This license will authorize the importation of goods and services from, and the exportation of goods, technology, and services to, Sudan. All imports had previously banned and only exports of food, clothing, and medicine had been allowed. The license will also authorize all transactions by U.S. persons relating to the petroleum or petrochemical industries in Sudan that were previously prohibited, including oilfield services and oil and gas pipelines. All property and interests in property blocked pursuant to the SSR will be unblocked, and U.S. persons will no longer be prohibited from facilitating transactions between Sudan and third countries to the extent previously prohibited by the SSR.

However, the general license includes a requirement for exports of agricultural commodities, medicine, and medical devices to be made pursuant to one-year licenses issued by the U.S. government and provides procedures for denying authorization for exports to Sudan that are determined to be promoting international terrorism. In addition, the general license does not eliminate the need to comply with other regulations related to terrorism, the proliferation of weapons of mass destruction, or narcotics trafficking.

Export Licenses. The Bureau of Industry and Security has issued a final rule providing that as of Jan. 17 it will generally approve, rather than generally deny, applications for licenses to export or reexport the following products to Sudan.

- parts, components, materials, equipment, and technology controlled on the Commerce Control List only for anti-terrorism reasons and intended to ensure the safety of civil aviation or the safe operation of fixed-wing commercial passenger aircraft (complete aircraft and aircraft-related items controlled for AT reasons and one or more additional reasons are not included in this policy)

- items controlled on the CCL only for AT reasons for use to inspect, design, construct, operate, improve, maintain, repair, overhaul, or refurbish railroads in Sudan

BIS states that persons interested in exporting or reexporting goods and technology that are subject to the EAR, including those listed above, to Sudan pursuant to OFAC’s new general license should consult BIS regarding any licensing obligations they may have under the EAR.

These general policies of approval apply only to exports and reexports to Sudan for civil uses by non-sensitive end-users within Sudan. Sensitive end-users include Sudan’s military, police, and/or intelligence services and persons that are owned by, part of, or operated or controlled by those services. Additionally, license applications for the export or reexport of items that would substantially benefit such sensitive end-users will generally be denied.

Executive Order. President Obama has issued an executive order providing for the revocation of the sanctions provisions in EOs 13067 and 13412 as of July 12 if the government of Sudan sustains the positive actions it has taken over the last six months. However, the property and interests in property of persons designated pursuant to EO 13400 and other EOs remain blocked.

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