US says future South Sudan state exempt from economic sanctions
The new state of South Sudan that will officially see the light in less than three months is exempt from the decade-long sanctions imposed on the entire country, the United States said today.
A referendum was conducted last January in which Southern Sudanese were asked to pick whether they want to have their own state or remain with the North as one nation.
The outcome was a near unanimous vote in favor of independence that is scheduled to take place at the end of the interim period on July 9.
On Tuesday, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) issued a press release explaining the sanctions policy with regard to the new state.
"When the new state is formed by Southern Sudan, it will not be included in the territorial boundaries of Sudan nor be governed by the Government of Sudan," OFAC said in its statement.
"Following interagency consultations, OFAC has concluded that the SSR will continue to apply only to Sudan and the Government of Sudan, and that such a new state and its government will not be subject to them".
Washington imposed economic and trade sanctions on Sudan in 1997 because of the North-South civil war and allegations that it is supporting terrorism. In 2006 and 2007 the embargo was strengthened over a separate conflict in Darfur.
OFAC said that this exemption is consistent with executive orders issued by the White House in the past which cited the need for sanctions " 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".
However, certain aspects of the sanctions may still apply if it involves properties or interests related to the government of Sudan.
"For example, the [Sudan Sanctions Regulations] SSR will prohibit a U.S. company, unless authorized by OFAC, from providing services to the petroleum industry in the new state if those services would benefit the Government of Sudan or relate to the petroleum industry in Sudan, or from transporting exports of petroleum or petrochemical products through Sudan.".
"Further, 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".
The new directive will likely infuriate Khartoum which has sought relentlessly to have the U.S. lift the sanctions since signing the 2005 Comprehensive Peace Agreement (CPA).
Washington has insisted that what it labeled as genocide in Darfur prevented it from revoking the embargo.
However, the U.S. administration said that it has initiated the process that may result in removing Sudan’s name from the list of countries that sponsor terrorism as a reward for facilitating the South’s referendum and later recognizing its results.
Countries on the list of state sponsors of terrorism cannot receive US aid or buy US weapons and a raft of restrictions on financial and other dealings. The list currently includes Cuba, Iran, Sudan and Syria.
But U.S. officials made it clear that lifting the comprehensive sanctions is contingent upon resolving the crisis in Darfur.
Despite that, the U.S. announced in October of last year that it was easing sanctions on agriculture equipment and services.
The head of the Government of Southern Sudan (GoSS) Mission in the U.S. Ezekiel Gatkuoth suggested in an emailed statement that today’s clarification by OFAC is a result of their efforts in lobbying the Treasury department and the Congress.
"The Republic of South Sudan will not have sanctions at all comes July 9th 2011. The GOSS Mission to USA and UN has been working with the Department of the Treasury of the USA and all the friends in the U.S. Congress to spell this out clearly and we are glad this comes true. GOSS appreciates and thanks the Obama administration and the people of the USA for their support to the cause of the people of South Sudan".
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