Is the SSR actually hurting South Sudan?

Yesterday, an article showed up on Corruption Currents claiming that sanctions on Sudan are hurting South Sudan. Sanctions have been in place on Sudan since the 1990s as a result of their support of terrorism and of course we have had no qualms about keeping them there for additional reasons including grave human rights abuses. This was well before South Sudan existed and U.S. policy has always been to aid in the humanitarian support of the marginalized areas of Sudan. This can be seen in 31 CFR 538.212(g)(1) and its corresponding definition 538.220 which exempted transactions to those parts of Sudan. Most of these areas became part of South Sudan after Juba declared independence in 2011 and the Sudanese Sanctions Regulations thus did not apply to them afterwards. With that said, due diligence was urged and still is encouraged when dealing with South Sudan to ensure that no Sudanese individuals or entities would be involved in a way that would otherwise prohibit the transaction. Mombasa is a nicer port than Port Sudan, so just truck it from the south, not the north and you should generally be fine. With that said, and contrary to what the cited article would have you believe, authorizations do exist for two things: 1. Transhipment of goods, technology and services to South Sudan [by way of Sudan] and 2. Activities relating to the petroleum industry of South Sudan In fact, to show how disingenuous the article is, I would rather just quote the general license which fully counteracts the assertion that U.S. sanctions prevent South Sudan from collecting profits on oil from Sudan: 538.536 (a) To the extent they are not exempt from the prohibitions of this part, all activities and transactions relating to the petroleum and petrochemical industries in the Republic of South Sudan are authorized, including but not limited to the transshipment of goods, technology,and services to or from the Republic of South Sudan through Sudan; exploration; development; production; field auditing services; oilfield services; activities related to oil and gas pipelines; investment;  payment to the Government of Sudan or to entities owned or controlled by the Government of Sudan of pipeline, port, and other fees; and downstream activities such as refining, sale, and transport of petroleum from the Republic of South Sudan, except for the refining in Sudan of petroleum from the Republic of South Sudan. Yep. Despite that the article says that sanctions are preventing Sudan from refining South Sudanese oil, the general license explicitly states that “downstream activities such as refining, sale and transport” are indeed allowed. According to the next paragraph, “all financial transactions ordinarily incident” are also allowed, so its also not a question of payment. To be fair, just because OFAC issued a general license doesn’t mean that everything is in the clear. The biggest hurdle is often getting through the culture of fear in which although you can specifically point someone to the legal document or passage that permits the activity, the party is still uncomfortable and unwilling to engage in the transaction. That being said, I don’t think this realistically applies to the oil sector in Sudan as I can point to one company that was more than enthusiastic to fill in the void when all the US companies left Sudan during the initial sanctions. I would also say that Sudan and South Sudan’s near-war experience over said oilfields has probably had a much greater effect than misinterpretation of U.S....

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