2022 Investment Climate Statements: Sudan

Policies Towards Foreign Direct Investment

The Sudanese government eagerly encourages foreign direct investment (FDI). The Ministry of Investment and International Cooperation acts as the government’s investment promotion agency for foreign investors seeking to initiate projects that include domestically produced content. The Ministry offers, depending on the type of project, a range of tax incentives, customs exclusions, and land grants to attract investment. The Ministry provides “single window” service for potential investors who submit project proposals and feasibility studies for review and possible approval. Project proposals are reviewed by officials and technical experts from related ministries. Potential investors are informed in writing of decisions to approve or reject project proposals.

Limits on Foreign Control and Right to Private Ownership and Establishment

The Investment Encouragement Act of 2021 establishes equal treatment to foreign and domestic business owners, allowing foreign investors to own business enterprises in Sudan. [Note: The law is new and its applicability untested. Officials at the Ministry of Investment and International Cooperation strongly encourage foreign investors to engage with a Sudanese partner when considering entering the market.] The Act requires foreign investors to deposit at least $250,000 to obtain a business 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.

There are foreign investment restrictions in the transportation sector, specifically in railway, freight transportation, inland waterways barge service, and airport operations. Most telecommunications and media, including television broadcasting and newspaper publishing, are closed to foreign capital participation. Foreign ownership is also restricted in the electrical power generation and financial services sectors. In addition to those overt statutory ownership restrictions, a comparatively large number of sectors are dominated by government monopolies, including those mentioned above. Such monopolies, together with a high perceived difficulty of obtaining required operating licenses, make it more difficult for foreign companies to invest.

Other Investment Policy Reviews

Sudan has not undergone any third-party investment policy reviews (IPR) through the Organization of Economic Cooperation and Development (OECD), the World Trade Organization (WTO), or the UN Conference on Trade and Development (UNCTAD) in the last five years.  No civil society organization, including those based in the host country or in third countries, have published reviews of investment policy-related concerns. UNCTAD’s last IPR of Sudan was in 2015.

In late 2020, the CLTG launched a series of economic reforms designed to meet the benchmarks established under the IMF’s Staff Monitored Program (SMP). The SMP focused on addressing major macroeconomic imbalances caused by decades of mismanagement, laying the groundwork for inclusive growth, and establishing a track record of sound policies required for debt relief. The CLTG subsequently enacted structural reforms which slashed costly and unsustainable subsidies, adopted foreign exchange liberalization, reduced the government’s fiscal gap, and improved public financial management. The CLTG’s significant progress under the SMP led to an Extended Credit Facility (ECF) program launched in June 2021. However, most IMF assistance was paused after the military’s October 25 government takeover.

On March 7, 2022, the Central Bank of Sudan abandoned its managed float policy and allowed the Sudanese Pound to freely float against other currencies. However, Sudan faces a severe foreign exchange reserves shortage and the national currency faces depreciation pressures. Domestic businesses have no assurance of obtaining needed levels of foreign currency for international transactions. The government strictly controls incoming hard currency from exports and business owners wishing to retrieve cash can only make withdrawals denominated in Sudanese pounds at the time of this report. Foreign companies operating in Sudan must have the Central Bank of Sudan’s permission to repatriate profits and foreign currency. The Investment Act of 2013 enshrines the right to repatriate capital and profits, provided the investor has opened an investment account at the Central Bank of Sudan before entering into business. To avoid banking delays, many Sudanese firms complete a significant number of transactions outside of official channels or complete transactions abroad in U.S. Dollars, Euros, Riyals, or Dirhams. Whether or not the government will revise its practices to ensure a steady stream of foreign exchange, if international correspondent banking ever resumes, remains to be seen. The Investment Act also established courts to handle investment issues and disputes.

Business Facilitation

According to the 2015 UNCTAD report, Sudan has put in place a relatively open investment legislative framework and many laws are in line with international best practices. However, their implementation is often impeded by the absence of secondary legislation, insufficient institutional capacity, and lack of coordination between different levels of government. https://investmentpolicy.unctad.org/investment-policy-review/205/sudan 

Sudan’s investment authority lists the process by which businesses must 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 no online business registration process.  Officials at the Ministry of Investment and International Cooperation recommend enlisting the service on an agent to help facilitate the business registration process.

http://investmentpolicyhub.unctad.org/Publications/Details/148  provides an outline of investment facilitation proposals.

www.GER.co  provides links to business registration sites worldwide.

Outward Investment

Sudan’s government does not have policies in place to promote outward investment. It does not restrict domestic investors from investing abroad.

http://www.sudaninvest.org/English/Invest-Services.htm 

Sudan has signed 30 bilateral investment agreements with: Algeria, Bahrain, Belarus, the Belgium-Luxembourg Economic Union, Bulgaria, China, Egypt, Ethiopia, France, Germany, India, Indonesia, Iran, Italy, Jordan, Kuwait, Lebanon, Malaysia, Morocco, the Netherlands, Oman, Qatar, Romania, South Africa, Switzerland, the Syrian Arab Republic, Tunisia, Turkey, the United Arab Emirates, and Yemen.  It does not have a bilateral investment agreement with the United States.

https://www.state.gov/investment-affairs/bilateral-investment-treaties-and-related-agreements/united-states-bilateral-investment-treaties/

https://investmentpolicy.unctad.org/international-investment-agreements/countries/199/sudan 

Sudan does not have a bilateral taxation treaty with the United States.  It is not a member of the OECD Inclusive Framework on Base Erosion and Profit Shifting.

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:

http://www.tpsudan.gov.sd/index.php/en/pages/details/154/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.

Dispute Settlement

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

Bankruptcy Regulations

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.

Investment Incentives

The Sudanese government lists the following investment incentives:

• Exemption from taxes on profits for a term of not less than ten years.
• Free land or land at an incentivized price for the project.
• Nondiscriminatory treatment of the capital of investment, whether be it public, private, cooperative, or multi-sector capital.
• Guarantees the capital shall not to be nationalized, confiscated, or expropriated except through a law and against indemnity.
• Guarantees that money invested in a project shall not be confiscated or frozen, except through a judicial order.
• Recognition that the investor is entitled to transfer his or her money and profits; and
• Customs privileges for vehicles.

http://sudanembassyke.org/index.php/economy-investment/why-invest-in-sudan/ 

The Investment Encouragement Act of 2021 included a provision to establish a specialized insurance company to insure 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. However, the government has not acted on this provision in the law.

The government currently does not offer any special incentives for clean energy investments, including renewable energy, energy storage, energy efficiency, clean hydrogen, carbon sequestration, low-carbon transport and fuels, or other decarbonization technologies.

Foreign Trade Zones/Free Ports/Trade Facilitation

Sudan currently operates free trade zones in Port Sudan and Garri. The Free Zones and Free Markets Law of 1994 govern these zones.  The investment authority reports that projects in areas designated as Free Trade Zones and Duty-Free Zones enjoy the following policies:

• Exemption from a tax on profits for 15 years, renewable for an extra period;
• Exemption from personal income tax for salaries of expatriates;
• Exemption from all customs fees and taxes except service fees for products imported into or exported abroad from the zone;
• Exemption from all taxes and fees for real estate inside the zone;
• Authorization to transfer invested capital and profits from Sudan abroad through any bank licensed to operate in the zone;
• Exemption from customs fees for products of industrial projects established in the zones depending on materials used and local costs incurred in production and provided the value be estimated by a designated committee;
• Guarantees that money invested in the zones may not be frozen, confiscated, or arrested;
• Authorization to store goods transiting Sudan in zones under the supervision of customs police; and,
• Authorization to rent its land and buildings according to the terms it agrees upon and without being bound by any other law.

http://www.sudaninvest.org/English/Sudan-Invest-FreeZone.htm 

Performance and Data Localization Requirements

The government does not follow “forced localization” policies but offers tax incentives to foreign investors to establish “value-added” industries within Sudan.

Real Property

Sudanese laws protect private property rights. However, these laws are poorly enforced, and the government has a history of arbitrary property seizures without providing adequate compensation. Mortgages and liens exist, but the property registration system is antiquated. Property disputes, often involving claims over traditional lands, can take years to resolve.

The government offers foreign investors restricted leases on land for specific projects. These leases are for five years but can be renewed in five-year increments for up to thirty years. Investors can transfer the leases to other investors, but only if the new investors maintain the general purpose of the original project.

Intellectual Property Rights

The legislative framework on intellectual property rights (IPR) is adequate, but enforcement remains uneven. Trademarks of popular American businesses, usually chain restaurants, are often used or changed slightly to suggest the original brand. Many grocery and hardware stores display American name-brand products shipped from Egypt and the United Arab Emirates. Sudan is not listed in the U.S. Trade Representative (USTR) 2021 Special 301 report or the 2021 Notorious Markets List. Sudan is in the accession process to join the World Trade Organization (WTO) and is not currently a party to the WTO’s Agreement on Trade-Related Intellectual Property Rights (TRIPS). Sudan is a member of the World Intellectual Property Organization (WIPO).

For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/. 

Capital Markets and Portfolio Investment

Sudan has a stock market (KSE) which is located in Khartoum. The KSE has over 67 companies ( http://www.kse.com.sd/ ) that include banks, brokerage firms, communication/media companies, investment and development houses, and industrial firms. Market trading occurs Sunday-Thursday from 1000-1200 local time. KSE has not published an annual report since 2019.

Money and Banking System

Historically, Sudan has not had access to international banking institutions as it was under comprehensive U.S. economic and financial sanctions until late 2017. The U.S. government delisted Sudan as a State Sponsor of Terrorism in December 2022. Despite lifting of these comprehensive sanctions, international banks remain reluctant to operate in Sudan. Most foreign banks operating in Sudan are based in Gulf states, such as Saudi Arabia, United Arab Emirates, or Qatar. Sudan faces a monetary crisis, with limited foreign exchange and a significant currency black market. The Central Bank of Sudan lists banks operating in Sudan at: https://cbos.gov.sd/en/content/operating-banks-sudan 

Under the IMF’s ECF program, Sudan has committed to strengthening financial sector soundness and mitigating risks, including through enhanced risk-based anti-money laundering and countering terrorist financing (AML/CTF) supervision. In June 2021, Sudanese authorities had completed ten required AML/CTF onsite inspections of local banks. The inspections focused on politically exposed persons, suspicious transaction reporting, and higher-risk customers and transactions in the real estate sector. Following the conclusion of these onsite inspections, the Central Bank planned to provide aggregate data to the IMF on violations identified and sanctions levied, in line with Sudan’s existing legal framework. Under the ECF, Sudan has agreed to complete a money laundering and terrorist financing national risk assessment (NRA) and to disseminate the results of the NRA to financial institutions, designated non-financial businesses and professions, and the general public. Sudanese civilian authorities also committed to endorse and adopt a national AML/CTF strategy to mitigate risks identified in the NRA. These are fundamental steps necessary to building an AML/CTF regime which can effectively respond to identified money laundering and terrorist financing threats.

Foreign Exchange and Remittances

Foreign Exchange

Most remittances come into Sudan via the informal market. International banking institutions began transactions with Sudan after U.S. financial sanctions were lifted. Most U.S. financial institutions have not established formalized correspondent banking relationships with Sudanese banks, with Wells Fargo-Qatar National Bank being the lone exception. (Note: This is a current development. Post has not evaluated the robustness of this relationship. End note.) Foreign investors should be aware that they may face problems making or receiving payments. The Central Bank adopted a floating exchange rate policy in March 2022. Continued macroeconomic difficulties following the 2021 military takeover and the suspension of international financial support has resulted in increased shortages of hard currency reserves.

Sovereign Wealth Funds

Sudan has a sovereign wealth fund called the Oil Revenue Stabilization Account, established in 2008.  The Natural Resource Governance Institute (NRGI) ranked it 32 out of 34 funds in its 2017 Resource Governance Index, and eight of nine funds in sub-Saharan Africa, ahead of Nigeria’s Excess Crude Account. ( https://resourcegovernanceindex.org/country-profiles/SDN/oil-gas .) The CLTG established a sovereign wealth fund in 2020 to manage real estate recovered by the Dismantling Committee. This fund is not operational.

State-owned enterprises (SOEs) associated with the military and security services play an unusually large role in the Sudanese economy and are currently involved in a range of commercial activities, including fuel storage, natural gas projects, solar panel manufacturing, infrastructure, the railroad sector, cotton and textiles, and food industries, including flour milling, bread production, and animal husbandry. Approximately 220 out of approximately 650 SOEs cataloged by the CLTG are associated with Sudan’s military and security services. Reportedly, many of these SOEs are inefficient and poorly managed; however, reforming and transferring them to civilian control has been politically sensitive. Although the CLTG made SOE reform a centerpiece of its broader economic and governance reform program, this agenda has stalled because of the military takeover.

As part of the IMF’s Extended Credit Facility (ECF) program, Sudanese authorities committed to take the following actions by June 2022: (1) endorse an ownership strategy that sets forth the oversight and management framework for SOEs and guiding principles for a review of the existing stock of SOEs; (2) publish end-2021 financial statements and audit reports for ten priority SOEs and creating a calendar for annual publication of these reports thereafter; and (3) publish a complete list of SOEs, including those in the intelligence sector. SOE audits from previous years exist but authorities have not yet made them public. The U.S. government, in concert with the IMF, continues to press the Sudanese authorities to accelerate their review of SOE operations and publish the aforementioned documents as steps toward greater transparency and adherence to its IMF program. However, military authorities have resisted these reform efforts.

Privatization Program

Sudan does not have an active privatization program in place for SOEs.

Sudan’s Investment Law (National Investment Encouragement Act, 1999, Amended (2013 and 2021)) sets the standards for business conduct and obligations. The law and its executive rules are applied to both Sudanese and foreign investors. The investment authority maintains oversight for “responsible business conduct” and provides information on regulations, services, and the various departments to which the investor could contact on its website:  http://www.sudaninvest.org/English/About-Ministry.htm . The investment authority also developed a “one-stop-shop” for information on land, customs, taxes, commercial registration, and agriculture among others. The law under its Chapter 6 “Privileges and Guarantees” and Chapter 8 “General Rules” commits the government to “non-nationalization or non-confiscation of projects.” Sudan’s Investment Council and Specialized Court create the regulations and are the bodies which settle overlapping issues. Sudan makes available an ombudsman at its Public Grievance Chamber ( www.ombudsman.gov.sd ). The Sudanese Constitution (1998) first established the General Ombudsman body. In 2011, Chapter V, Article 147 (1) of the Constitution (2011) established the Public Grievances Chamber. The Ombudsman’s office explains its complaint process and other information online. Corruption in the supply chain for commodities and minerals within the major cities and in the conflict-affected areas remains a concern.

Sudan falls short of consistently strong supply chain due diligence. For example, while the government takes positive steps through its Ministry of Animal Resources ( http://mar.gov.sd/en/index.php/departments/view_dept/2 ) to outline regulations for implementation of livestock and fisheries administration, it does not, through its Ministry of Energy and Mining, prohibit the harmful use of cyanide or other dangerous chemicals in gold mining operations. In fact, the government and private companies use cyanide in gold extraction. Sudan is not an adherent to the OECD’s Guidelines for Multinational Enterprises on Responsible Business Conduct International, does not participate in the Extractive Industries Transparency Index (EITI) nor participates in the Voluntary Principles on Security and Human Rights.

Climate Issues

Sudan’s government does not have a natural climate strategy nor strategy for monitoring natural capital, such as biodiversity and ecosystems. It does not have policies to reach net-zero carbon emissions, nor are there any regulatory incentives in place to encourage resource efficiency, pollution abatement, or climate resilience.

Corruption is widespread in Sudan. The law provides criminal penalties for corruption by officials; nevertheless, government corruption at all levels is widespread. The Bashir regime made a few efforts to enforce legislation aimed at preventing and prosecuting corruption.  The law provides the legislative framework for addressing official corruption, but implementation under the Bashir regime was weak, and punishments were lenient. Officials found guilty of corrupt acts could often avoid jail time if they returned ill-gotten funds. Under the Bashir regime, journalists who reported on government corruption were sometimes intimidated, detained, and interrogated by security services.

A special anticorruption attorney investigated and prosecuted corruption cases involving officials, their spouses, and their children. Punishments for embezzlement include imprisonment or execution for public service workers, although these were almost never carried out. Under the Bashir regime, media reporting on corruption was considered a “red line” set by the National Intelligence and Security Services and a topic that authorities, for the most part, prohibited newspapers from covering. While reporting on corruption was no longer a red line under the CLTG, media continued to practice self-censorship on issues related to corruption.  In August 2019, Omar Bashir was formally indicted on charges of corruption and illegal possession of foreign currency. Bashir’s trial began in August 2019; in December 2019, he was convicted and sentenced to two years’ imprisonment on these charges. Bashir remains imprisoned as further charges are pending.

Financial Disclosure: Under the Bashir regime, the law required high-ranking officials to publicly disclose income and assets. There were no clear sanctions for noncompliance, although the former Anti-Corruption Commission possessed discretionary powers to punish violators. The Financial Disclosure and Inspection Committee and the Unlawful and Suspicious Enrichment Administration at the Ministry of Justice both monitored compliance. Despite three different bodies ostensibly charged with monitoring financial disclosure regulations, there was no effective enforcement or prosecution of offenders.

The 2019 Constitutional Declaration includes financial disclosure and prohibition of commercial activity provisions for members of the Sovereign Council and Council of Ministers, state and regional governors, and members of the Transitional Legislative Council. It also mandates the creation of an anti-corruption commission (not established) and an Empowerment Elimination, Anti-Corruption, and Funds Recovery Committee (informally called the Dismantling Committee). However, following the October 2021 military takeover, the commission was abolished, many of its members imprisoned on corruption charges, and many government employees dismissed at the Commission’s direction were re-instated in their positions. Sudan ranked 164 out of 180 countries on Transparency International ‘s 2021  Corruption Perceptions Index .

https://www.transparency.org/en/cpi/2021 

Resources to Report Corruption

Shaza Elmahdi
Consultant on Sudan
Center for International Private Enterprise
1211 Connecticut Avenue NW, Suite 700, Washington, D.C. 20036
+1 202-721-9200
selmahdi@cipe.org

Transparency International U.S. Office
1100 13th St NW, Suite 800Washington, DC 2000520005
Info-us@transparency.org

Sudan’s political and security environment is volatile. Neighborhood Resistance Committees, political parties, and other groups opposing the October 25, 2021, military takeover regularly stage large protests aimed at forcing the military leadership to relinquish control and return Sudan to its democratic transition. These protests have become violent, with 102 protesters killed as of June 2022 and over 2,000 injured by police and security forces since October 2021. On March 21, 2022, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Sudan’s Central Reserve Police for the use of excessive force against peaceful protestors.

On May 23, 2022 the U.S. Department of State, the U.S. Department of the Treasury, the U.S. Department of Commerce, and the U.S. Department of Labor issued a business advisory to highlight growing risks to American businesses and individuals associated with conducting business with Sudanese State-Owned Enterprises (SOE) which includes all companies under military control (hereafter collectively referred to as “SOEs and military-controlled companies”). These risks arise from recent actions undertaken by Sudan’s Sovereign Council and security forces under the military’s control and could adversely impact U.S. businesses, individuals, other persons, and their operations in the country and the region.

U.S. businesses, individuals, and other persons, including academic institutions, research service providers, and investors (hereafter “businesses and individuals”) that operate in Sudan should be aware of the role of SOEs and military-controlled companies in its economy. Though Sudan’s military has long controlled a network of entities, following its seizure of power on October 25, 2021, it is in effective control of all SOEs. Further, Sudan’s military is increasing its direct control of Sudan’s many SOEs and plans for civilian control over SOEs has been abandoned. Businesses and individuals operating in Sudan and the region should undertake increased due diligence related to human rights issues and be aware of the potential reputational risks of conducting business activities and/or transactions with SOEs and military-controlled companies. U.S. businesses and individuals should also take care to avoid interaction with any persons listed on the Department of the Treasury’s Office of Foreign Assets Controls’(OFAC) list of Specially Designated Nationals  and Blocked Persons (SDN List).

The business advisory relates specifically to SOEs and military-controlled companies. The U.S. government does not seek to curtail or discourage responsible investment or business activities in Sudan with civilian-owned Sudanese counterparts.

The full business advisory here:  https://www.state.gov/risks-and-considerations-for-u-s-businesses-operating-in-sudan/.

Sudan suffers from high unemployment, unofficially estimated at 40%. The Sudanese educational system produces many skilled and talented workers, but an absence of career options prompts many to emigrate in search of better opportunities. U.S. business contacts have praised the professionalism of their Sudanese counterparts. Sudan is also experiencing a demographic “bulge” that has resulted in a disproportionate number of potential workers under 25 years of age. There is a large, informal market of small entrepreneurs. The country’s borders are porous, producing a large pool of unskilled labor market, with many workers from Ethiopia, South Sudan, and Syria.

In November 2019, the CLTG dissolved all trade unions and associations as part of its effort to dismantle the remnants of the Bashir regime. The CLTG encouraged the formation of new trade unions. In 2021, the Ministry of Labor and Administrative Reform, with technical input from the International Labor Organization (ILO), finalized the drafting of a Trade Union Law.  The draft law was not, however, passed prior to the military takeover.

There is no active DFC agreement, nor any other existing investment guaranty or investment incentive agreement between Sudan and the United States.

Justine King
Economic Officer
U.S. Embassy Khartoum
+249-(0)18-702-2000 ext.2035
KingJA3@state.gov