We received a status report on Sudan as of April 2016 from our correspondent at Dubai, UAE. We summarised its contents as follows:
Politics and security
Sudan economy is in a state of woe resulting from the border strife with South Sudan, tribal skirmish, US sanctions and the crash in the oil price. Currency devaluation has been rapid and there has been a widening gap between market and official rates.
At port Sudan itself there has been minimal problem of local civil security. The regime’s efforts to control both its political power and its economic woe have spawned myriad government security agencies and trading and import organisations. The impact of this has been most obvious in the wheat trade. During 2015, two ships waited at the anchorage for about 6 months whilst the private sector importer negotiated a solution to manipulation of the currency exchange rates employed by the regime to pay for cargoes.
Whilst there are limited UN and EU sanctions against Sudan, US sanctions remain a troublesome issue. The US effectively prohibits its nationals and corporate and other entities from conducting any form of trade with Sudan. The US also effectively bans the use of US dollar transactions to and from Sudan. Therefore, many banks question any financial transaction which relates to Sudan, whether or not it is in US$ for fear of being frozen out of the US financial system. Both government-controlled Agricultural Bank of Sudan and Farmers’ Bank that are the main purchasers of wheat and fertiliser are on the OFAC SDN list, and this automatically puts international banks on the alert. Agricultural Bank of Sudan makes regular claims for shortages and has adopted the habit of automatic ship arrest. US underwriters are automatically constrained by US sanctions orders. However, they may obtain OFAC permission in specific case both to provide security and to reimburse members for claims incurred in Sudan. Some underwriters have agreed to provide security, and will make payments of fees etc., provided that no transactions are in US$. Some have refused. As such, the current status is not in order.