US firms exempt from embargo in South Sudan development
October 10, 2007 (JUBA, Sudan) — U.S. firms working to develop south Sudan will be exempted from U.S. sanctions under a deal to encourage investment in the impoverished region, a southern official said on Wednesday.
But South Sudan Finance Minister Kuol Athian said U.S. companies would not be allowed to invest in Sudan’s oil sector.
Following a north-south peace deal in 2005 ending Africa’s longest civil war, a semi-autonomous south Sudan government was formed with the right to vote on secession by 2011.
But U.S. economic sanctions, imposed on Sudan since 1997 after Washington accused Khartoum’s Islamist government of “supporting terrorism”, have prevented big U.S. and even European firms investing to rebuild the country.
“Investors who are interested in south Sudan are welcome. American companies are welcome to come,” Athian said.
But he said the new deal negotiated with the U.S. Office of Foreign Assets only applied to companies coming to invest in development of the south, which has little infrastructure already straining to cope with a huge influx of hundreds of thousands of returning refugees post peace.
U.S. dollar transactions to southern Sudan would also be made easier, he said.
“Not for the oil … but other companies can come, and they can transfer their money to south Sudan,” he said.
The southern central bank’s deputy manager Kornelio Koriom said until now direct dollar transfers had been difficult.
“The movement of funds (and) settlement of payments in dollars was not allowed,” said Koriom, added the southern central bank now had its own swift code for sending and receiving dollars.
He said foreign investors to the south who had been deterred by the dollar restrictions would now be able to transfer dollars in and out of the south.
“Now it will be easy to arrange any payment,” Koriom said.
Sudan’s northern central bank said in September that it planned to convert all dollar reserves into euros and other currencies by year end to avoid problems with U.S. dollar transactions.
The peace deal allocated the south about 50 percent of oil revenues from wells south of the border with northern Sudan.
But the south has complained of a lack of transparency and delays in transfers from the north which controls the oil sector, hindering the function of their administration.
Athian said a new system would increase the south’s quick access to the cash.
“(Under) the new system, after the sale the oil we will get our share directly to our Bank of South Sudan, not through Khartoum,” said Athian, who cut the deal with the American Office of Foreign Assets in September.
(Reuters)