US Relaxation Measures January 2017

The US Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) has amended the Sudanese Sanctions Regulations (the “Regulations”) to authorize all prohibited transactions, including transactions involving property in which the Government of Sudan has an interest. OFAC stated it is issuing this general licence in connection with ongoing US-Sudan bilateral engagement and in response to positive developments in the country over the past six months related to bilateral cooperation, the ending of internal hostilities, regional cooperation, and improvements to humanitarian access.

OFAC amended the Regulations to authorise all transactions prohibited by the Regulations and by Executive Orders 13067 and 13412, effective as of 17 January 2017. Newly authorized transactions include the processing of transactions involving persons in Sudan; the importation of goods and services from Sudan; the exportation of goods, technology, and services to Sudan; and transactions involving property in which the Government of Sudan has an interest.The order is subject to a 6 month review and depends on the continued improvement in behaviour on the part of the Government. A permanent lifting of sanctions and the unfreezing of Government assets will also depend on the approach adopted by the US under President Trump.

Notwithstanding the above, section 906 of the Trade Sanctions Reform and Export Enhancement Act of 2000, as amended (“TSRA”), continues to require that the export of agricultural commodities, medicine, and medical devices to Sudan be made pursuant to one-year licences issued by the US government, except that the requirements of such one-year licences shall be no more restrictive than general licences administered by the Department of the Treasury. Section 906 TSRA also specifies that procedures be in place to deny licences for certain exports of agricultural commodities, medicine, and medical devices to Sudan. As with a general licence added to the Regulations in 2011 that authorized the exportation or re-exportation of food to Sudan, the new general licence includes the one-year licence requirement and, along with counter-terrorism sanctions implemented by OFAC set forth in 31 CFR chapter V and other continuing requirements and authorities, satisfies TSRA’s requirement that procedures be in place to deny authorization for exports to Sudan that are determined to be promoting international terrorism. In particular, § 501.601 of the Reporting, Procedures and Penalties Regulations, 31 CFR part 501 (RPPR), requires that all US persons maintain records of authorized transactions for a period of not less than five years and further provides that OFAC may obtain these records at any time to monitor activities conducted pursuant to the general licence. Section 538.502 of the Regulations provides that OFAC may exclude any person, property, or transaction from the operation of this general licence. Furthermore, Section 501.803 of the RPPR provides that OFAC may amend, modify, or revoke this general licence at any time.

This new general licence does not eliminate the need to comply with other provisions of 31 CFR chapter V including those parts related to terrorism, the proliferation of weapons of mass destruction, or narcotics trafficking, or other applicable provisions of law, including any requirements of agencies other than OFAC. Such requirements include, for example, the Export Administration Regulations (15 CFR parts 730 through 774) administered by the Bureau of Industry and Security of the Department of Commerce. This general licence does not affect past, present, or future enforcement actions or investigations with respect to any violations, including apparent or alleged violations, of the Regulations that occurred prior to the effective date of this final rule.