June 5, 2007
On May 29, 2007, in response to the continuing conflict in Sudan, the United States imposed new sanctions against Sudan. The U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), which maintains and enforces U.S. sanctions, has added three Sudanese individuals and thirty-one entities that have reportedly played a role in perpetuating violence and undermining peaceful resolution of the Sudanese conflict to the list of Specially Designated Nationals (“SDNs”). This designation requires that all assets held by or on behalf of the designated parties in the United States be frozen. Moreover, U.S. persons, including U.S. companies and their foreign branches, may not enter into any transactions with SDNs, and U.S. banks may not process transactions involving SDNs, meaning that the sanctions effectively isolate the designated parties from the U.S. financial system. Although U.S. sanctions apply to all individuals and entities who are physically located in the United States, no U.S. sanctions against Sudan apply to non-U.S. parties located outside of the United States.
The three sanctioned individuals include two senior officials in the Sudanese government and one rebel leader. Ahmad Muhammad Harun, Sudan’s State Minister for Foreign Affairs, and Awad Ibn Auf, Sudan’s head of Military Intelligence and Security, have been accused of committing war crimes and supporting militia groups that have waged a campaign of violence against rebels and civilians in southern Sudan. Khalil Ibrahim is the leader of a violent rebel faction that has refused to sign the Darfur Peace Agreement.
Thirty of the companies that OFAC has listed as SDNs are owned or controlled by the Government of Sudan, and most are connected to the lucrative mining and petroleum industries. Accordingly, these companies generate a significant amount of revenue that the Sudanese government uses to prosecute its war against rebels in southern Sudan. The other designated company has provided small arms, artillery, and ammunition to Sudanese government forces and government-sponsored militia. A full list of the thirty-one companies can be found at http://www.treas.gov/offices/enforcement/ofac/actions/20070529.shtml.
In mid-April, President Bush threatened to impose these sanctions, but he delayed doing so to give the United Nations additional time to pursue a diplomatic solution to the Sudanese conflict. In the intervening weeks, however, violence has escalated as government-sponsored militias have continued to attack rebels and civilians in southern Sudan, and the Government of Sudan has continued to obstruct UN efforts to deploy a peacekeeping force in Sudan. Accordingly, President Bush ordered OFAC to enforce existing sanctions more aggressively and impose the additional sanctions against Sudan.
In a brief statement summarizing the new sanctions, President Bush reiterated U.S. support for deployment of a joint African Union-United Nations peacekeeping force in Sudan, implementation of the Darfur Peace Agreement, and resolution of the conflict through diplomatic means. He also instructed the U.S. State Department to begin consulting with U.S. allies on a new UN Security Council resolution that would impose multilateral sanctions against Sudan, including a comprehensive arms embargo. The likelihood that the Security Council would adopt such a resolution in the near future seems remote, however, because China has already expressed its opposition.
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For further information, please contact the Gibson, Dunn & Crutcher attorney with whom you work, or the following members of the firm’s International Trade Regulation and Compliance Practice Group:
Judith A. Lee (202-887-3591, [email protected])
Daniel J. Plaine (202-955-8286, [email protected])
Jim Slear (202-955-8578, [email protected])
Andrea Farr (202-955-8680, [email protected])
Elizabeth Cannon* (202- 887-3507, [email protected])
Patrick Speice* (202-887-3776, [email protected])
* Admitted only in Virginia; practicing under the supervision of Principals of the Firm.
© 2007 Gibson, Dunn & Crutcher LLP
The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.