Transparency of the Regulatory System
Some ministries and regulatory agencies distribute the text or summary of proposed regulations before their enactment to interested stakeholders but are under no legal obligation to do so. There is no period of time set by law for the text of proposed regulations to be publicly available. Some agencies make received comments publicly accessible. There is no specialized government body or department tasked with soliciting and receiving these comments. Some ministries and agencies report on the results of the consultation on proposed regulations in the form of one consolidated response in an official gazette, journal, or other publication or directly distributed to interested stakeholders. This reporting on the results of the consultation is not required by law. https://rulemaking.worldbank.org/en/data/explorecountries/sudan# . There is no centralized online location where key regulatory actions are published. https://rulemaking.worldbank.org/en/data/explorecountries/sudan#
Regulations are developed at the federal (national), state, and local levels. Ministries develop regulations to support federal laws, while state and local jurisdictions can adopt additional regulations to address local concerns. Federal legislation is the most relevant to foreign businesses.
Under the CLTG, legislation was drafted using a consensus approach that included input from affected ministries, consultations with local academics, business leaders, and international experts. The consultation period did not make the draft legislation available for public comment. The legislation was next reviewed by the Ministry of Justice (MoJ) to determine if it conformed to the Sudanese Constitution. After receiving MoJ approval, the legislation was reviewed and endorsed independently by the civilian Council of Ministers and the joint military-civilian Sovereign Council. Following endorsement, the bill would receive final approval by a majority vote during a joint Council of Ministers/Sovereign Council. The approved legislation would become law once it was published in the MoJ’s Official Gazette. [Note: With the ouster of Prime Minister Hamdok and dissolution of the CLTG’s Council of Ministers, military authorities have governed through the Sovereign Council by decree. End Note.]
New regulations are posted on ministry websites and made available in printed pamphlets and booklets. Regulations are legally reviewable in court. Several ministries have committees that review complaints and arbitrate regulatory disputes.
The CLTG committed to strengthen governance and improve fiscal transparency by establishing civilian control over all public finances and assets, including those under the control of the Sudanese security and intelligence services, and to develop a transparent budget that accounts for all public expenditures. The government sought to institutionalize its commitment to accountability and good governance through the development and adoption of a Public Financial Management (PFM) roadmap by September 2021. The roadmap would seek to outline a series of medium-term actions to address identified PFM vulnerabilities. Although finalization of the roadmap was derailed by the military takeover, the draft roadmap would provide a useful reference point for future civilian leadership to adopt.
International Regulatory Considerations
Sudan’s Ministry of Industry and Trade provides a list of all of Sudan’s bilateral and regional trade agreements:
Sudan is a signatory of the Greater Arab Free Trade Area Agreement (GAFTA) and a member of the Common Market for Eastern and Southern Africa (COMSEA). It is not a member of the WTO. Sudan does not currently qualify for the U.S Generalized System of Preferences (GSP).
Legal System and Judicial Independence
Sudan’s legal code is a mixture of British common law practices, Islamic law, and customary law. Contracts are enforced through the courts. Sudan has written commercial and contractual laws. Business regulations or enforcement actions are appealable and are adjudicated in the national court system. The Investment Act of 2013 established courts to handle disputes.
Laws and Regulations on Foreign Direct Investment
Sudan’s investment authority lists the process by which businesses much register to operate at: http://www.sudaninvest.org/English/Default.htm . The website outlines procedures for companies that wish to invest, including forming and ending relationships and license applications. There is not an online business registration process.
On May 12, 2021, Sudan passed Public Private Partnership Law No. 10 of 2021, which aims to create a business-friendly environment that attracts foreign investors. The law is part of a set of reforms driven by the transitional government to achieve a successful transition to an open, dynamic, and business-friendly economy. The law organizes and promotes public private partnerships (PPPs) to encourage private entities to invest and participate in projects alongside public entities. It also intends to ensure transparency and integrity in procedures and equal and fair treatment for bidders. The law creates a central unit with an independent budget to ensure the development, management, and implementation of PPP projects. It allows both the public and private sectors to suggest PPP projects.
The Investment Encouragement Act, which was issued on 11 April 2021, seeks to improve on the 2013 Investment Act in terms of treatment of investors regardless of their nationality, and to create a more predictable and transparent regime that facilitates investment. Key changes include: (i) provision of new tax exemptions, including as regards the business profits tax; (ii) creation of an investment register for collecting data on investing entities; (iii) introduction of an online investment guide to clarify and facilitate investment procedures; (iv) creation of a specialized insurance company that insures investors against various risks (e.g., risks of nationalization, risks of war, domestic conflict and civil disobedience, risks of recession, etc.) for an annual premium, and (v) publication of a special exclusion list detailing the sectors and activities not available to foreign investors.
The new law also requires foreign investors to deposit at least $250,000 to obtain a license. Furthermore, it clarifies the definitions of the various types of investment projects which were regulated in the 2013 Act, including State Projects, Investment projects, National Projects, and Strategic Projects.
The law was published in the official Sudan Gazette of 12 May 2021 and is available at: https://moj.gov.sd/files/index/28 .
Competition and Antitrust Laws
The Economic Security Department of the General Intelligence Service (GIS) reviews transactions (mergers, acquisitions, etc.) and conduct (cartels, monopolization) for competition-related concerns (whether domestic or international in nature). This system is opaque; however, its decisions can be appealed through the judicial system.
Expropriation and Compensation
The government has the legal right to expropriate private property for public use under its eminent domain powers. The government has a history of expropriating private property without adequately compensating owners. In certain circumstances the government has incarcerated owners who refused to surrender their property.
The CLTG formed the Empowerment Elimination, Anti-Corruption, and Funds Recovery Committee (commonly called the Dismantling Committee) in November 2019 after the CLTG approved a law to dismantle the institutions established under the Bashir regime. Despite initial steps by the Committee to recover assets stolen during the Bashir dictatorship and remove Bashir allies from leadership positions in government institutions, its efforts lacked a clear strategy and legal framework for recovering assets domestically and abroad associated with the banned National Congress Party, its officials, and its affiliates. Some of the Committee’s actions appeared partisan, capricious, and undertaken unilaterally without coordination with the Ministry of Finance and Economic Planning, the agency that should, in theory, lead on asset recovery efforts. For example, the Committee oversaw the firing of over two hundred Central Bank of Sudan (CBOS) technical experts in March 2021 but provided no recourse for those who contested their supposed affiliation with the National Congress Party. After the military takeover, members of the Committee were explicitly targeted for arrest. Several former members remain in custody on charges of criminal breach of trust, illicit wealth, and dealing in foreign exchange. Meanwhile, hundreds of government officials dismissed by the Committee were reinstated at the CBOS, Ministries, and other government agencies, although it is unclear how many of those reinstated are genuinely affiliated with the Bashir regime and how many are merely long-serving civil servants.
The government controls most of the agricultural land in Sudan and has sold or leased millions of acres to Saudi Arabia and other countries. Land laws have historically been an issue of dispute between local communities and the government. The most recent examples of government expropriations were in 2019 when the Bashir regime bulldozed churches and sold the land to private investors. The government claimed the churches did not have permits. Some churches which had existed for decades lacked permits because the government would not issue them. The government claimed the churches were simply squatting on the land illegally. According to the law, for eminent domain claims the government should have compensated the churches. That did not happen in all cases. Government and Arab militias’ expropriation of land in Darfur, Gedaref, and Kassala states without compensation have been reported. In some cases, displaced persons returned to their land only to be denied access. In most instances, the government did not adequately respond to appeals.
ICSID Convention and New York Convention
Sudan has been a member of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States since 1973. Sudan became a member of the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards in 2018.
International Commercial Arbitration and Foreign Courts
The Sudanese Arbitration Act of 2016 codifies Sudan’s role in arbitration. “Application of the Act: Subject to the provisions of international agreements, pertaining to arbitration, to which Sudan is a party: 1) the provisions of this Act shall apply to every arbitration conducted in the Sudan, or abroad, where the parties thereof have agreed to subject the same to the provisions of this Act whenever the legal relation is of a civil nature, whether contractual or non-contractual…” https://www.international-arbitration-attorney.com/wp…/Sudan-Arbitration-Law.pdf
The Bankruptcy Act of 1929, Companies Act of 2003, and Insolvency Act of 2011 are the key bankruptcy laws currently in force in Sudan. The bankruptcy system is based on British legal traditions.