March 23, 2007
Overview of Treasury and Commerce Regulations Affecting U.S. Exports to Sudan
The following requirements must be met in exporting to Sudan:
-- Sudan is under a broad U.S. embargo, and was designated in 1997 by the Secretary of State as a State Sponsor of Terrorism. Pursuant to Executive Order 13067 of 1997 and E.O. 13412 of 2007, the Department of the Treasury maintains extensive trade restrictions on exports and re-exports to Sudan.
-- The Darfur Peace and Accountability Act recently eased, but did not remove, sanctions in the South. Certain activities in the South involving U.S. entities no longer require licenses from the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC). This change applies in particular to: 1)Financial transactions between the South and neighboring countries such as Kenya and Uganda; and 2) Flows of non-sensitive goods and services between the South and neighboring countries such as Kenya and Uganda.
-- Although sanctions are eased on the South, restrictions remain. Most notably, the oil sector remains subject to the same sanctions as before, as do any entities owned or controlled by the Government of Sudan (even if located in the South). In addition, commercial transshipments that go through the North to reach the South still require OFAC licenses. However, humanitarian transshipments will soon be covered under a general license. Most financial transactions involving the South still require OFAC licenses if they go through Khartoum.
-- The Department of the Treasury's Office of Foreign Assets Control (OFAC) administers the trade and investment embargo; OFAC and the Department of Commerce's Bureau of Industry and Security (BIS) share licensing responsibility for proposed U.S. exports and re-exports to Sudan.
-- As a result, those planning to export goods, technology, or services to Sudan, or U.S. persons who will perform contracts in support of projects in Sudan,must seek a license from OFAC, under its Sudanese Sanctions Regulations, 31 C.F.R., Part 538, unless the transactions fall under the exemptions created by the DPAA.
-- In order to obtain a license, interested parties should submit to OFAC a written license request with a detailed description of the transactions to be undertaken, including, if known, identification of third country and/or Sudanese sub-contractors, the types of activities Sudanese persons may be hired to perform, and information regarding controlled items to be exported to Sudan from the United States or third countries.
-- That submission should be sent to:
U.S. Department of the Treasury
Office of Foreign Assets Control
1500 Pennsylvania Ave., NW - Annex
Washington, DC 20220
Attn: Licensing Division
-- OFAC, in consultation with the Department of State, will subsequently make a licensing determination.
-- Furthermore, they must also gain authorization from BIS for the export and re-export of, Commerce Control List items to Sudan under the Export Administration Regulations (EAR). This requirement holds true for all of Sudan. The Export Administration regulations can be located at www.access.gpo.gov/bis/ear/ear_data.html
-- BIS reviews applications and issues export licenses, which are valid normally for two years.
-- If an export license is required, exporters must prepare a Form BIS-748P, "Multipurpose Application Form," and submit it for review and approval. The application form can be used for requesting authority to export or re-export, or to request BIS to classify items. Requirements for submitting a license are detailed in Part 748 of the EAR. The best and fastest way to submit an export application forms is to use the on-line Simplified Network Application Process (SNAP). Exporters can also request a Form BIS-748P:
by fax at (202) 482-3617;
by telephone on (202) 482-3617;
by writing the U.S. Department of Commerce Office of Exporter Services, P.O. Box 273, Washington, DC 20044; or
by email via www.bis.doc.gov/Forms/OrderingFormsOnLine.html.
-- Exporters must be certain to follow the instructions on the form carefully. In most cases, technical brochures and support documentation must also be included.
-- BIS conducts a complete analysis of the license application along with all documentation submitted in support of the application. BIS reviews the item, its destination, its end use, and considers the reliability of each party to the transaction. In addition to our review, applications are often sent for interagency review by the Departments of State, Energy, and/or Defense.
-- The sanctions in place include prohibitions on doing business with those on OFAC's "Specially Designated Nationals and Blocked Persons (SDN) List." Note that this list includes some companies active in the South. You may not do business with an SDN, regardless of where in Sudan it is operating. The SDN list can be found at: www.treas.gov/offices/enforcement/ofac/sdn/t11sdn.pdf.
-- The sanctions also include prohibitions on undertaking business transactions with individuals or firms listed on BIS's "Denied Persons List." It is found at: www.bxa.doc.gov/dpl/thedeniallist.asp.
-- Finally, firms must ensure that they do not conduct business with firms on BIS's "Unverified List," which is found at: www.bxa.doc.gov/enforcement/unverifiedlist/unverified_parties.html
NOTE: This paper is intended only as an overview of the regulations affecting exports to Sudan administered by the Department of the Treasury and the Department of Commerce. It is not intended as a comprehensive list of legal requirements or restrictions applicable to transactions involving Sudan, nor does it relieve persons of their obligation to comply with all applicable laws and regulations. It should be noted in particular that Sudan's placement on the state sponsors of terrorism list imposes several categories of restrictions, including a ban on defense exports and sales, and certain controls over exports of dual use items, as well as restrictions on foreign assistance and miscellaneous financial and other restrictions.