Illinois Law Restricts Business Connections to Sudan – Many Companies Will Be Asked for Certification

January 26, 2006

On January 27, the Act to End Atrocities and Terrorism in the Sudan, Public Act 094-0079 ("the Act"), will become effective in Illinois. This legislation amends the Illinois Deposit of State Moneys Act to prohibit the investment of state funds in Sudanese entities and in domestic companies who do business with Sudan. Due to its broad scope, the new law will likely affect a large number of companies.

The Act provides that the State Treasurer may not invest Illinois funds in debt instruments issued by "forbidden entities," which are defined as:

  • the government of Sudan;

  • companies managed or controlled, in whole or in part, by the government of Sudan;

  • companies who are incorporated in Sudan or have their principal place of business in that country;

  • companies who were identified by the Office of Foreign Assets Control (OFAC) as sponsors of terrorism;

  • companies who violate United States sanctions against Sudan after January 27, 2006 and become subject to OFAC penalties; and

  • companies who fail to certify under oath that they do not have assets or employees in Sudan and that they do not engage in business with Sudanese entities.

Media organizations, non-governmental organizations certified by the United Nations, and other entities who provide humanitarian relief or educational services are specifically excluded from the definition of forbidden entities.

The Act further provides that Illinois funds can only be deposited at financial institutions who require loan applicants to certify that they are not forbidden entities. Finally, the Act prohibits the investment of pension funds with intermediaries who fail to fully divest such funds from any forbidden entities within eighteen months after the effective date of the Act.  

For further information, please contact Judith A. Lee at (202) 887-3591 or Radu Costinescu at (202) 955-8259 in the Washington, D.C. office of  Gibson, Dunn & Crutcher LLP.

© 2006 Gibson, Dunn & Crutcher LLP

The enclosed materials have been prepared for general informational purposes only and are not intended as legal advice.