April 21, 2018

Sanctions and U.S. corporations in South Sudan

Today, the Office of Foreign Assets Control (OFAC) issued a brief guidance note on the situation for U.S. people and corporations interested in operations in the new country of South Sudan, following its formal birth on July 9.

In short, OFAC explains that the sanctions that currently prohibit U.S. entities conducting business in Sudan and with the Sudanese government will not apply to the new country nor to its government. As OFAC explains,the sanctions  “will continue to apply only with respect to the future, smaller Sudan and its government is consistent with the fact that the President issued E.O.s 13067 and 13412 to deal with the threat that the policies and actions of the Government of Sudan pose to the national security and foreign policy of the United States.”

This does not, however, mean the return of the U.S. oil industry – at least not without special permission from OFAC.

The guidance makes clear that to the extent the oil industry benefits the Sudanese government, participation in the industry remains prohibited. For instance, “should a revenue-sharing arrangement between Sudan and the new state result in a situation where the government of the new state makes payments to the Government of Sudan from the sale of Southern Sudanese petroleum, U.S. persons generally could not engage in transactions involving the oil industry in the new state unless authorized by OFAC.”

Now I guess we wait to see who starts petitioning OFAC for permission . . .

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