Export Compliance

Who’s on First—When is an Embargo not an Embargo?

If you’ve never seen the classic Who’s on First comedy routine, well, then your cultural education is just sadly incomplete.

That rapid fire shtick turns on the routine use of double meanings, viz. person names and field positions. The listener is left hanging on by their fingernails and only once they follow the twists and turns in that dialogue do they get the joke and enjoy a good belly laugh.

We have recently seen a modern adaptation of the Who’s on First routine play out with regards to double meanings; in this case, when is an embargo not an embargo?

The sanctions picture for Sudan is somewhat complex at the moment, finding its origins and its impacts in various federal regulations, executive orders, and other designations. Below are the highlights.

Intro

It is important to keep in mind that the US Department of State continues to publish the State Sponsors of Terrorism list. You will readily see that Sudan continues to be one of three designated state sponsors of terrorism. The list had included six countries earlier in this millennium, but Libya, North Korea and Cuba have all been removed from that short list in recent years for various reasons. Three others remain: Sudan, Syria, and Iran. The effect of such a designation is to impose a fairly comprehensive embargo against the designated country. Other than humanitarian relief, little else is authorized in the way of transactions, as a matter of law (sans a specific license from one or more federal agencies). That’s the generic picture, but now for the shtick on Sudan.

Executive Order 13067

Executive Order 13067 instituted Sudan sanctions under the Clinton Administration. The EO prohibits the export or reexport, directly or indirectly, to Sudan of any goods, technology (technical data, software, or other information), or services by any U.S. person, wherever located, or requiring the issuance of a license by a federal agency . . . of the facilitation by a U.S. person, including but not limited to brokering activities, of the export or reexports of goods, technology, or services . . . to Sudan from any location . . . or the performance by any U.S. person of any contract, including a financing contract, in support of a . . . governmental project in Sudan; or the grant or extension of credits or loans by any United States person to the Government of Sudan. Whew!

Executive Order 13761

However, comma, Executive Order 13761 was issued by the outgoing Obama Administration on January 13, 2017. It provided that if the Secretary of State publishes a notice in the Federal Register on or before July 12, 2017 stipulating that certain criteria have been met by the Government of Sudan, then effective July 12, 2017, sections 1 and 2 of EO 13067 will be revoked. This would provide authorization for most of the activities listed in this article’s paragraph immediately above. Again, this is a delayed implementation, with a caveat.

OFAC General License

But as if that wasn’t enough to get your head spinning, the U.S. Department of the Treasury, Office of Foreign Assets Control followed suit with a General License pertaining to Sudan on January 17, 2017. This final rule issued by OFAC published an amendment to the Sudanese Sanctions Regulations that appears to provide an “all clear” for activities prohibited under the Executive Orders cited above. Although that might be the impression at first glance, attention must be specifically given to Note 2 to 31 CFR 538.540 which states (and I quote in full, with emphasis added):

“This authorization is effective on January 17, 2017 and does not eliminate the need to comply with other provisions of 31 CFR chapter V or other applicable provisions of law, including any requirements of agencies other than the Department of the Treasury’s Office of Foreign Assets Control. Such requirements include the Export Administration Regulations (15 CFR parts 730 through 774) administered by the Bureau of Industry and Security of the Department of Commerce and the International Traffic in Arms Regulations (22 CFR parts 120 through 130) administered by the Department of State.”

In Conclusion

And so what all that says is that if any other U.S. Government Agency requires a license for activities with respect to Sudan, then nothing in the OFAC General License supersedes that requirement. In fact, Commerce does require licenses for all items/information subject to the Export Administration Regulations with respect to Sudan. This is specifically because the Export Administration Regulations also continue to list Sudan as a Terrorist Supporting Country (country group E:1), and is subject to a rather comprehensive embargo for that reason. All shipments of equipment, providing technical assistance or training that releases technical information about controlled goods, to Sudan, from any location, requires a specific license from the US Department of Commerce, Bureau of Industry and Security, the OFAC general license notwithstanding.

Recap:  So when is an embargo not an embargo?  Well, not yet.  Get the joke?  Me neither.


Gary Hagen is a principal export controls professional at Pacific Northwest National Laboratory, and is a former Chair (2013) of the Export Control Coordinators Organization. He was the producer of the Export Professor series of 15 short YouTube videos: www.pnnl.gov/exportprofessor.
Immediately prior to joining PNNL in 2010, he had been both the Export Controls Officer and the Government Relations Officer for an Idaho research university. And before that, he flew in P-3C Orion aircraft as an active duty Naval Flight Officer for over 26 years. He holds an MBA, has been married to the same woman for nearly 40 years, and together they have three adult children . . . none of whom have ever remotely considered pursuing a career in export controls.