The Sudan Circus: Bashir government laying heavy against sanctions

Sudan has been quite vocal about U.S. sanctions and their own diplomacy recently, particularly with the UN assembly going on. A while back the Sudanese government tried to emotionally blackmail the U.S. out of sanctions for fear that it is hurting South Sudan. Then President Bashir attempted to start a diplomatic riff by threatening to travel to New York for the General Assembly, an action that will most likely land him in jail. And to top it off, the Sudanese government is now claiming that sanctions are creating a humanitarian crisis in Sudan.   Why Omar al-Bashir is allowed to have a hissy-fit in New York, despite U.S. sanctions   Considering that the UN assembly is already underway and anyone working or living near Turtle Bay probably hates their life/commute/city right now, this post is a bit late on the news. However, there has been a bit of controversy over whether Sudanese President/indicted criminal Omar al-Bashir would travel, and would be able to travel to the U.S. Most of the media focus has been on the fact that al-Bashir has been indicted by the ICC and there is a very real possibility that should he travel to the U.S. he would be arrested and sent to face justice. One question I got however is if he would be able to travel here under U.S. sanctions. After all, the Government of Sudan is considered blocked property and thus as his visit would constitute an action on behalf of the GoS, any transactions would be blocked. The answer is that good ole Omar would be able to travel to the U.S. despite the sanctions. First, there are generally carve-outs such as those found in 31 CFR 538.515 which allow for transactions for the official business of the Sudanese diplomatic mission, particularly in relation to the UN. More importantly, this is a good time to reiterate that under the International Emergency Economic Powers Act (IEEPA), travel is also exempt. The legislation forming IEEPA specifically exempts information materials, travel, humanitarian donations and communications. This is often reinforced in each of the regulations under IEEPA (it does not apply to Cuba which falls under the Trading With the Enemy Act however) and is generally found under the prohibitions section (often times referred to as the 200 section) titled exemptions. It is a broad exemption in which the language in the SSR is indicative of language in other regulations: [31 CFR 538.210] (d) Travel. The prohibitions contained in this part do not apply to transactions ordinarily incident to travel to or from any country, including exportation or importation of accompanied baggage for personal use, maintenance within any country including payment of living expenses and acquisition of goods or services for personal use, and arrangement or facilitation of such travel including non-scheduled air, sea, or land voyages. As you can see, the travel exemption covers not only transportation but also housing, reasonable living expenses and buying goods for personal use such as food, drink and a toothbrush. So whichever hotel that wants to shoulder the burden of his arrival can certainly take his money.   Sudan clearly likes throwing stones in glass houses   Last week we debunked how sanctions are hurting South Sudan. This week, the Sudanese justice minister declared that U.S. sanctions were creating a humanitarian crisis in Sudan, something that is most likely untrue for several reasons. 1. The export of food, medicine and medical devices is allowed either through general license or specific license via the Trade Sanctions Reform Act (TSRA). Unlike TSRA dealings with Iran that suffer from problems such as...

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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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Awkward…

Apparently Sudan, a sanctioned country, is now a supplier of weapons to the Free Syrian Army. This is a little awkward…for all involved… Western analysts and officials said Sudan’s clandestine participation in arming rebels in Syria suggests inherent tensions in Mr. Bashir’s foreign policy, which broadly supports Sunni Islamist movements while maintaining a valued relationship with the Shiite theocracy in Iran. Remember, there is a general license (GL 16) authorizing the export of services to the National Coalition (basically a blanket for the FSA). However, part (d) of the license states that all other programs (including the Sudan program) are not overridden and must be enforced. While the GL also has the note at the end saying that you can take the originators word, you may want to still take these events in as part of your calculus.  ...

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