U.S. Departments of State, Treasury, Commerce and Labor Highlight Risks for Engaging with Sudanese SOEs

The U.S. Departments of State, Treasury, Commerce and Labor outlined risks and related considerations for U.S. entities seeking to conduct business with Sudanese State-Owned Enterprises ("SOEs") and military-controlled companies.

In a joint advisory, the Departments urged U.S. entities to conduct more comprehensive due diligence relating to human rights and possible reputational risks prior to engaging in business activities with SOEs. The Departments cautioned that engaging with SOEs or military-controlled companies may violate current sanctions regulations, and that U.S. companies should take steps to avoid dealing with sanctioned entities or individuals. The Departments encouraged companies to employ "an appropriately tailored risk-based approach to sanctions compliance by developing, implementing, reviewing and routinely updating their sanctions compliance policies and procedures."

In addition, the Departments highlighted that Sudan's current commercial code lacks the framework to (i) combat the rise in inflation, poverty and corruption, (ii) mitigate and resolve financial disputes, (iii) secure assets and collateral and (iv) enforce contracts. The Departments pointed out that the Sudanese military is ill-equipped to implement reforms necessary to address these issues.