International Trade Law News

Published by Jacobson Burton Kelley PLLC

Today the Treasury Department’s Office of Foreign Assets Control (OFAC) issued a final rule in the Federal Register amending the Sudanese Sanctions Regulations (31 CFR Part 538) by adding a general license authorizing the export and reexport of medical devices, medicine and agricultural commodities to the so-called “Specified Areas of Sudan” (the permissible areas in Sudan described below).

OFAC's general license is effective immediately.

As a result of the Trade Sanctions Reform and Export Enhancement Act of 2000 (TSRA) all exports and reexports of medical devices, medicine and agricultural commodities of U.S. or non-U.S.medical devices to Sudan currently require a one-year specific license to be issued by OFAC. U.S. companies have experienced significant delays in obtaining one-year licenses from OFAC. The issuance of the general license resolves the conflict between TSRA and the Darfur Peace and Accountability Act of 2006.

As a result of today’s amendments to the Sudanese Sanctions Regulations, U.S. companies and their affiliates may export and reexport medical devices, medicine and agricultural commodities to the following Specified Areas in Sudan:

Southern Sudan, Southern Kordofan/Nuba Mountains State, Blue Nile State, Abyei, Darfur, and marginalized areas in and around Khartoum. The term “marginalized areas in and around Khartoum” means the following official camps for internally displaced persons: Mayo, El Salaam, Wad El Bashir and Soba.

It will still be necessary to obtain a one-year specific license from OFAC prior to making any sales of medical devices, medicine and agricultural commodities to the Government of Sudan, to any individual or entity in an area of Sudan other than the Specified Areas of Sudan, or to persons in third countries purchasing specifically for resale to the Specified Areas of Sudan.

There is a unique feature of this the new general license that must be taken into account with respect to future sales to Sudan under this general license. Because the TSRA only authorizes one-year licenses, this general license will cover exports shipped within the twelve-month period beginning on the date of the signing of the sales contract. Each year by the anniversary of the September 9, 2009 effective date, OFAC will determine whether to revoke the general license or not. Unless revoked, the general license will remain in effect.

In addition, note the following other compliance-related aspects associated with the use of OFAC’s Sudan general license:

• The general license authorizes the making of shipping and cargo inspection arrangements, the obtaining of insurance, the arrangement of financing and payment, the entry into executory contracts, and the provision of brokerage services for such sales and exports or reexports.
• The general license cannot be used for any transaction with any party on OFAC’s List of Specially Designated Nationals and Blocked Persons, including persons.
• The general license cannot be used to ship products to any parties associated with the petroleum or petrochemical industries in Sudan.
• The use of the general license is subject to OFAC’s standard recordkeeping requirements and all records relating to the transaction must be maintained for a period of not less than five years from the date of delivery.
• The transshipment or transit of permissible exports through areas of Sudan other than the Specified Areas of Sudan is still prohibited.

Labels: OFAC, Sanctions; Sudan