Latest U.S. government action will force South Sudanese government and companies to show that the country’s oil will benefit its people and not enrich corrupt elites, fuel violence
March 21, 2018 (Washington, DC) – Today, the United States announced it was taking action against 15 South Sudanese oil-related entities “whose revenues have contributed to the ongoing crisis in South Sudan.” U.S. as well as non-U.S. companies will now need a license to export, re-export, or transfer exports of any U.S.-origin goods or technology to the listed entities.
Brad Brooks-Rubin, Managing Director at The Sentry and the Enough Project, said: “Today's action by the Commerce Department is an important use of non-sanctions measures to build pressure for peace in South Sudan. With these new requirements, South Sudanese entities will be forced to show that their work will benefit the country rather than provide funding to militias or line the pockets of corrupt leaders. The private sector, including both the extractives and financial sectors, should follow these measures carefully and ensure that they are not facilitating further conflict and corruption in South Sudan.”
Brian Adeba, Deputy Director of Policy at the Enough Project, said: “This move is an important step in the search for peace in South Sudan. As the next round of the South Sudan peace talks approaches, it is important for the United States and its partners to continue to build leverage by increasing these types of pressures to target as wide a network as possible to ensure that the parties to the conflict change their calculations in favor of peace.”
Why is today’s announcement noteworthy?
- The Entity List is a list maintained by the U.S. Department of Commerce for broader export controls. It does not freeze assets but requires U.S. as well as foreign exporters re-exporting U.S.-origin goods and technology to get a license from the Commerce Department. This means that even non-U.S. companies with U.S.-origin parts or technology in their oilfield equipment would need to apply for a license, which is unlikely to be granted because there is a presumption of denial for all applications.
- In their due diligence, banks and others in the private sector often include listed entities in the same filters as the U.S. Department of Treasury’s Specially Designated Nationals and Blocked Persons List. There is usually a flag that distinguishes the meaning of the Entity List and indicating that it means a license is needed rather than being a no-go; however, it clearly warns the user that these are high risk companies and ministries.
- South Sudan is now the African country with the most number of entities on the Commerce Department’s Entity List, and the only African country with government ministries included.
Joshua White, Director of Policy and Analysis at The Sentry, said: “Today's announcement by the Commerce Department is only the latest action taken by the United States, European Union, Canada, and Australia to hold the Government of South Sudan accountable for its violent kleptocracy, which fuels the conflict in which millions of its people have suffered. The corrupt elites of South Sudan only have to look to the cases of Iran and North Korea to understand the financial consequences that this strategy of pressure can have on those who commit human rights abuses, their supporters and broader networks.”
Earlier this month, The Sentry published an investigative brief that sheds light on how South Sudanese elites are exploiting the country’s oil to fund militias and enrich themselves.
Click here to read “Fueling Atrocities: Oil and War in South Sudan.”
About THE SENTRY
The Sentry is composed of best-in-class financial forensic investigators, policy analysts, and regional experts who follow the dirty money and build investigative cases focusing on the corrupt transnational networks most responsible for Africa’s deadliest conflicts. By creating a significant financial cost to these kleptocrats through network sanctions, anti-money laundering measures, prosecutions, and other tools, The Sentry aims to disrupt the profit incentives for mass atrocities and oppression, and creates new leverage in support of peace efforts and African frontline human rights defenders. The Sentry’s partner, the Enough Project, undertakes high-level advocacy with policy-makers around the world as well as wide-reaching education campaigns by mobilizing students, faith-based groups, celebrities, and others. Co-founded by George Clooney and John Prendergast, The Sentry is an initiative of Not On Our Watch (NOOW) and the Enough Project. The Sentry currently focuses its work in South Sudan, Sudan, the Democratic Republic of Congo, Somalia, and the Central African Republic.
In less than two years, The Sentry has created hard-hitting reports and converted extensive research into a large volume of dossiers on individuals and entities connected to grand corruption, violence, or serious human rights abuses. The investigative team has turned those dossiers over to government regulatory and law enforcement agencies in the U.S. and around the world, as well as to compliance officers at the world’s largest banks.
Learn more at www.TheSentry.org.
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