The departments of State, Commerce, and Labor recently issued a joint advisory to highlight risks for U.S. businesses, individuals, and other persons, including academic institutions, research service providers, and investors, conducting or contemplating business in the country of South Sudan. According to the advisory, these risks continue to grow as a result of South Sudan’s transitional government’s failure to implement political and economic reforms, improve transparency and public financial management, and address pervasive, endemic corruption and human rights violations.
Specific activities and sectors of concern include government tenders, oil and gold, contracts managed by government entities for the delivery of assistance, and arms, military equipment, and related activity. U.S. businesses and individuals involved in operations or supply chains tied to the transitional government of South Sudan or involved with private enterprises in these specific sectors should exercise caution. The advisory notes that businesses and individuals that do not conduct appropriate due diligence run the risk of engaging in conduct that may expose them to significant reputational, financial, and legal risks, including violations of U.S. anti-bribery and anti-money laundering laws and economic sanctions programs.
The advisory points out that federal agencies have already taken a number of actions involving South Sudan and related companies and individuals in recent years. These include sanctions blocking the property of designated individuals and entities, placing more than a dozen entities on the Bureau of Industry and Security’s Entity List (which imposes restrictions on exports to named entities), listing cattle from South Sudan on Department of Labor lists of goods made with forced and/or child labor, and suspending South Sudan’s eligibility under the African Growth and Opportunity Act.
The advisory notes that the U.S. government does not seek to curtail or discourage responsible investment or business activities in South Sudan with civilian-owned South Sudanese counterparts that are independent from improper ties to government institutions or officials.
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