Sanctions, forex policy to hinder Sudan growth

KHARTOUM, June 7 (Reuters) – Sudan’s boom economy is likely to take a downturn after Washington strengthened sanctions against Khartoum and Sudan’s central bank restricted foreign currency transactions, analysts and traders say.

Last week the United States imposed further sanctions on Sudan to pressure the government to halt the violence in its Western Darfur region and the central bank introduced measures to limit foreign exchange transactions and curb imports.

Despite U.S. sanctions since 1997, Sudan’s largely cash economy has enjoyed real growth rates averaging of 7 percent over the past 10 years and hopes to reach 10-13 percent in 2007.

But the new measures may scare off investors and slow economic growth.

“I think this will have a very bad effect on foreign investment in Sudan,” said businessman Hashim Sid Ahmed.

“It is very clear that if you have tense relations with the West, do not expect big foreign investment in your country,” he said. “And …then you come with a policy which restricts the remittances of foreign exchange to the investors.”

Two Sudanese companies named by the United States on the sanctions list, Sudan’s national Sudan Telecommunications Co. (Sudatel) and al-Sunut, a joint venture to develop Khartoum, were seen as the biggest hit.

“Trading in Sudatel usually takes up 60 percent of the day’s trades,” said trader Jamal Abu Youssef. “But since the last decisions (sanctions and the central bank policy) it’s become weak and fallen to 10 percent.”

He added one reason for this was because foreigners mostly traded in Sudatel, one of the few Sudanese companies to also be listed outside the country on the Abu Dhabi bourse.

“Before a broker could buy foreign exchange from any exchange bureaux and change money within 24 hours but now with the central bank policy the process could take 7-10 days and for foreign investors outside this is too long,” he addded.

He said not only was the slower process to repatriate funds scaring off foreign investors, but the U.S. sanctions also made investors more cautious.

Sudan’s finance ministry said the embargo would have little effect on the economy, as investment came mainly from Asia and the Gulf rather than the West.

But Sid Ahmed disagreed. “Sanctions means you are closing the door to foreign investment in Sudan,” he said.

Also badly hit was the real estate development company al-Sunut. Its mention on the U.S. list has left the ambitious $4.5 billion project to transform Khartoum into a high-rise 21st century city in difficulties.

To date it has sold just over half its business office blocks and not yet begun its residential development on prime real estate where the Blue and White Niles meet in Khartoum.

Osama Dawoud’s private Dal Group managing the project has a good reputation. Al-Sunut is a joint venture with Khartoum’s state government and the National Social Insurance Fund.

Dawood also has the agency for Coca-Cola in Sudan.

Sources in Khartoum’s trading community said Dal Group now faced two choices. Pull out of al-Sunut or buy out any government share which could cost between $50-80 million. But there was no guarantee they would then be off the list.

Al-Sunut declined to immediately comment.

Pressure from Khartoum’s business community forced the central bank to say it may review one part of the new policy, which requires all importers to pay at least 40 percent of their letters of credits with banks up front.

Sudan’s 2006 trade deficit almost doubled to $2.4 billion. But in a country where, after decades of war, goods are only now appearing freely on the market and are already expensive, businessmen said the measure would cause massive inflation.

Al-Amin al-Sheikh Mustafa, a former big businessman who now runs schools to provide free education for children, said imports should not be curbed. Rather depressed local industries needed to be overhauled. “You need to raise exports,” he said.

Sid Ahmed agreed, saying the government had appointed political allies rather than qualified experts to head up local industry, which had damaged exports.

“Political affiliations are more important than credentials,” he said.

The central bank did not say it would revise the currency restrictions, which apply to Sudanese nationals, specifying they could only deposit cash sent from outside Sudan into dollar bank accounts and that any amount over $10,000 being taken out of the country had to be declared.

The bank said it was trying to combat money laundering.

Traders said a black dollar market had already begun, with the dollar buying 2.04 Sudanese pounds on Thursday compared to 2.01 in the banks.

How US sanctions in Sudan will work

The Christian Science Monitor

This January, the US Treasury took an action aimed at a particular bank halfway around the world.

The move – putting Bank Sepah of Iran on a blacklist of institutions barred from access to America’s financial system – bore immediate fruit, Treasury officials say.

“Banks in the United States were legally required to cut off relations…. But banks in Europe, Japan, and other financial centers also responded, limiting or cutting off entirely their ties to this bank of their own accord,” Adam Szubin, who heads the growing Treasury effort called the Office of Foreign Assets Control, told a congressional hearing in April.

The goal of such actions, which have been expanding since the Sept. 11 terrorist attacks in 2001, is to put a financial squeeze on regimes, individuals, or institutions that threaten national security. And although the impact of such financial sanctions is limited, they are becoming an important tool of US policy in nations of concern, such as Iran and North Korea.

Blacklisting in Sudan

Now their efficacy will be tested in Sudan. The Bush administration this week added 30 companies and three individuals in Sudan to its blacklist, citing the goal of pressuring the Sudanese government to halt the violence that plagues the Darfur region.

By itself, the action isn’t expected to force any policy shift in Khartoum. But financial experts say the move is more than mere symbolism. Financial sanctions, even if imposed by the US alone, can send a powerful signal.

“It is potentially a very strong tool,” says Raymond Baker of the Center for International Policy in Washington. “An awful lot of foreign institutions will look at that list and say, well, we don’t want to take the chance that we will end up violating US law.”

The Treasury blacklist – officially a list of “Specially Designated Nationals” (SDNs) – operates in a very different manner from broader forms of economic sanctions that can be imposed on foreign regimes.

A trade embargo, for example, is intended to seal off the target nation from all flows of goods and services. But it often has only a marginal impact, unless most major trading nations form a united front.

The SDN list is not as sweeping, but that can work in its favor as a policy tool. It affects financial flows among banks and other institutions. By focusing on a carefully selected pool of targets, the SDN list has won a broad degree of international cooperation.

“A key, if possibly counterintuitive, lesson that we have learned is that less can be more,” Mr. Szubin told the April hearing. “Narrow sanctions against specific individuals or entities that have violated international code, whether they be counterproliferation, counterterrorism, anti-money laundering norms, may have a bigger impact than traditional embargo-type sanctions.”

The reason, he says, is simple: “Broad sanctions are often viewed by the private sector as obstacles to be worked around.”

Another factor that explains the international acceptance of the SDN list is the central role that Wall Street institutions play in world financial markets. US banks are so large, and the world’s financial grid is so interlinked electronically, that it is hard for banks in other nations to know which of its transactions are passing through American entities. Rather than run afoul of the US government, banks in Europe or elsewhere tend to adopt America’s SDN list as their own.

“If that foreign institution handles a transaction for one of those barred parties, and the electrons of that transaction pass through New York City, then they have violated US law,” says Mr. Baker, who studies the flow of money tied to drug cartels, terrorism, and corruption.

Sanctions to help bring peace

The Treasury doesn’t necessarily track transactions down to each electron for all SDNs. But the system can apply significant leverage nonetheless. This doesn’t mean it’s a quick fix for the Darfur crisis. President Bush has labeled the violence there genocide, citing actions of government-backed janjaweed militias. The death toll is estimated at more than 200,000, with another 2.5 million people displaced in the region since 2003.

The Sudanese government is financed heavily by its oil industry, and the new sanctions aren’t expected to cut off the nation’s oil exports. China, a key customer for Sudanese oil production, has remained opposed to financial sanctions.

China’s representative on African affairs, Liu Guijin, said Tuesday that “pressure and sanctions” do not help resolve problems, according to a Reuters report.

The 30 companies targeted by the US include several oil-related businesses, as well as a range of others – in industries from machinery to sugar. The sanctions also restrict financial dealings by three individuals, a rebel leader, and two government officials who the Treasury Department says have acted as liaisons with the janjaweed.

Matthew Levitt, an analyst at the Washington Institute for Near East Policy, says sanctions can work alside other measures, such as diplomacy. “They are one part of the tool kit,” whether with Sudan or Iran, where the US is concerned about how to curb nuclear- weapons proliferation. The Treasury concluded that Bank Sepah had aided in missile-technology transactions.

U.S. move seen having little bite on Sudan

International Herald Tribune

The Bush administration’s new sanctions against Sudan aim to squeeze the country’s economy by freezing Sudanese companies out of American financial institutions and curtailing their dollar transactions. U.S. government officials described the sanctions during recent interviews and press briefings as a significant move to raise the pressure on Omar Hassan al-Bashir, Sudan’s president, to bring a quick end to the violence in Darfur.

But the sanctions will do little to stem Sudan’s oil exports, which are the main source of the country’s wealth, analysts said. They also noted that existing sanctions against Sudan, which date back to 1997, have been unevenly enforced.

“Sudan has been quite adept at avoiding sanctions for the past decade, and this is not going to have a lot of bite,” said Philippe de Pontet, a political risk analyst at the Eurasia Group in Washington.

In recent years, Sudan has emerged as a small but fast-growing oil producer, first with the help of American and European corporations and more recently with investments from Chinese, Indian and Malaysian companies. Sudan now pumps about 500,000 barrels of oil a day, bringing in enough wealth to set off an economic and real estate boom in Khartoum, the capital.

The latest sanctions are specifically aimed at more than 30 companies owned or controlled by the government of Sudan. They include five petrochemical companies and the country’s national telecommunications operator, Sudatel.

More than 100 local companies have already been blacklisted by the U.S. Treasury Department, among them Sudan’s biggest oil producer, the Greater Nile Petroleum Operating Co. The company, which pumps about 300,000 barrels a day, is a joint venture of the Sudanese government and state oil companies from China, India and Malaysia, and is operated by the China National Petroleum Corp.

Andrew Natsios, the U.S. special envoy for Sudan, acknowledged at a news conference Tuesday that the new sanctions would have limited effects on the country’s oil production and exports.

“The purpose of these sanctions is not sanctions,” he said. “The purpose of these sanctions is to send a message to the Sudanese government to start behaving differently when they deal with their own people.”

At least 200,000 people have been killed and more than 2.5 million displaced in Darfur, a region in western Sudan. The White House has called the violence there genocide.

In a brief speech in the White House on Tuesday morning, President George W. Bush said: “The United States will not avert our eyes from a crisis that challenges the conscience of the world.”

The European Union has signaled its willingness to consider new sanctions against Sudan, but China and Russia have been opposed. Without an international consensus on more stringent economic sanctions, the United States has few options, analysts said.

“We don’t have much commercial activities or fat targets of opportunities for slapping new sanctions on Sudan,” said J. Stephen Morrison, director of the Africa program at the Center for International and Strategic Studies in Washington.

[Britain supports U.S. efforts to toughen UN Security Council sanctions against Sudan because of the situation in Darfur, a British official traveling with Prime Minister Tony Blair told The Associated Press and Reuters on Wednesday.]

The companies named by the Treasury Department on Tuesday included a sugar producer, an automobile company and a vegetable oil producer. The administration also singled out two senior officials – Ahmad Haroun, state minister for humanitarian affairs, and Awad ibn Auf, the country’s director of military intelligence – and Khalil Ibrahim, leader of a rebel group called the Justice and Equality Movement.

A Sudanese foreign ministry spokesman called the sanctions “unfair and untimely.”

According to The Associated Press, South Africa’s ambassador to the United Nations, Dumisani Kumalo, questioned the timing of the sanctions at a time when the UN, the African Union and Sudan are negotiating access to Darfur for an increased international force.

The Bush administration said it would seek a new United Nations resolution imposing an arms embargo against Sudan and would bar the Sudanese government from conducting any military flights in Darfur.

But in aiming at Sudan’s economy, Washington seems to be toeing a sensitive line. It wants to increase the pressure on the Sudanese government without alienating China, a top American trading partner. It is also apparently unwilling to consider outright oil sanctions against Sudan at a time when global energy prices are high.

David Rubenstein, executive director of the Save Darfur Coalition, said the United States should make Sudan a higher priority in its diplomatic relations with China. “The Chinese have the most leverage to influence Khartoum,” he said.

Amnesty doubts Sudan sanctions, urges Arab pressure

CAIRO, May 30 (Reuters) – Amnesty International said on Wednesday U.S. sanctions alone would do little to stop violence in Sudan’s Darfur region and urged Arab states to press Khartoum to accept a hybrid peacekeeping force.

“The support of the entire international community is needed to have an impact on the Sudanese government,” Amnesty’s Secretary-General Irene Khan told reporters after meetings at the 22-member Arab League.

“We think there needs to be international mobilisation rather than unilateral action at this stage.”

Accusing the Sudanese government of obstructing U.N. efforts to bring peace to Darfur, U.S. President George W. Bush said on Tuesday the U.S. Treasury Department would bar 31 companies controlled by Sudan from doing business in the U.S. financial system.

Khan said Arab states should press Sudanese President Omar Hassan al-Bashir to accept U.N. packages to support an African Union peacekeeping force of 7,000, which is seen as a prelude to a larger hybrid force of more than 23,000 troops and police.

Bashir has stalled for months to let international peacekeepers into Darfur.

Experts say more than 200,000 people have died and 2 million have been driven from their homes since 2003.

Khartoum says 9,000 have died in Darfur and rejects accusations of genocide. It has criticised the sanctions, saying it was cooperating with the United Nations.

“We are asking the Arab League to continue the process it has opened with the Sudanese government to ensure early deployment of international peacekeepers,” Khan said. “There is still some way to go to see the U.N. and African force on the ground and we would like to see that happen quickly.”

Sudan: U.S. sanctions to have little fiscal impact

KHARTOUM, May 30 (Reuters) – Sudan believes fresh U.S. economic sanctions will have minimal impact in Khartoum because the country has no direct trade ties with the United States, a senior Sudanese Finance Ministry official said on Wednesday.

U.S. President George W. Bush imposed new unilateral sanctions on Sudan on Tuesday and sought support for an international arms embargo out of frustration at Sudan’s refusal to end what he called genocide in war-ravaged Darfur.

“It doesn’t have that much effect on the economy. We don’t have direct economic or trade relations with the United States,” the Finance Ministry official told Reuters, asking not to be named because he was not authorized to speak to the media.

“Our economy is shifting from the USA and Europe to the East. We have almost 70 percent of our foreign trade with the East,” he said, adding that the government conducts most of its financial transactions in euros.

Despite sanctions that have blocked much Western investment, Sudan’s economy has benefited from Chinese and Asian funds with an expected growth rate of up to 13 percent this year. China buys much of Sudan’s 330,000 barrels per day of crude oil, sells Khartoum weapons and invests heavily in construction projects.

Accusing the Sudanese government of obstructing U.N. efforts to bring peace to Darfur, Bush announced new sanctions that would bar 31 companies controlled by Sudan from doing business within the U.S. financial system.

The companies targeted include firms in Sudan’s booming oil business and one accused of transporting weapons to government and militia forces in Darfur. Bush also imposed fiscal sanctions on four Sudanese individuals, including two senior officials and a rebel leader suspected of involvement in Darfur violence.

Sudan’s ambassador to the United States, John Ukec Lueth, questioned the fairness of the sanctions because they did not include major American companies like Coca-Cola Co. , and said they targeted the poor.

“I don’t think that the government officials, hundred of them, will stop getting tea and sugar,” he said in Washington.

MORE A POLITICAL STATEMENT

Analysts said they saw the sanctions as more a political statement than a measure likely to push Khartoum to act against perpetrators of violence in Darfur, where the United Nations says 200,000 people have died since conflict flared in 2003.

“The support of the entire international community is needed to have an impact on the Sudanese government,” Amnesty International Secretary-General Irene Khan told reporters after meetings at the 22-member Arab League in Cairo.

“We think there needs to be international mobilization rather than unilateral action at this stage.”

Sudan is already an almost entirely cash economy, even for very large transactions. Credit cards are not accepted even at the country’s most expensive hotels and shops.

“The sanctions are more a political statement of U.S. displeasure. … It is a tool the U.S. has used in many places in the world,” said Alex Vines, Africa analyst at Chatham House in London.

“In the short term, the Sudanese are going to be very frustrated. They may dig their heels in,” he said, adding that might translate into a slowdown in talks for a “hybrid” Darfur peacekeeping force, although Sudan may ultimately still agree.

Sudan says it hopes to reach a compromise with the United Nations over the proposed hybrid force, which envisions more than 23,000 African Union and U.N. troops and police to protect civilians in Darfur and the use of force to deter violence.

The United States and Britain are also considering expanding U.N. Security Council sanctions on Sudan, but China, Russia and South Africa are wary such action would stop violence in Darfur.

Although penalties, such as an international arms embargo, would have more impact than the expanded U.S. sanctions, U.N. bans against Sudan have been hard to enforce.

U.N. Secretary-General Ban Ki-moon, who has been talking to Sudanese leaders, refused to comment directly on sanctions but indicated they may interfere with his consultations.

Khalil Ibrahim

TAHA, Khalil Ibrahim Mohamed Achar Foudail (a.k.a. IBRAHIM, Khalil; a.k.a. MOHAMED, Khalil Ibrahim); DOB 15 Jun 1958; POB El Fasher, Sudan; alt. POB Al Fashir, Sudan; nationality Sudan; National Foreign ID Number 4203016171 (France) issued 20 Feb 2004; Registration ID 0179427 (France); Chairman, Justice and Equality Movement; Co-founder, National Redemption Front (individual) [DARFUR]

Ahmad Muhammed Harun

HARUN, Ahmad Muhammed (a.k.a. HAROUN, Ahmed Mohamed; a.k.a. HAROUN, Ahmed Mohammed; a.k.a. HARUN, Ahmad; a.k.a. HARUN, Ahmad Muhammad; a.k.a. HARUN, Mawlana Ahmad Muhammad); DOB 1964; POB Kordofan, Sudan; nationality Sudan; State Minister for Humanitarian Affairs; former State Minister for the Interior; former Coordinator of the Popular Police Forces (individual) [DARFUR]

Awad Ibn Auf

AUF, Awad Ibn (a.k.a. AUF, Awad Muhammad Ibn; a.k.a. AUF, Mohammed Ahmed Awad Ibn; a.k.a. AWF, Awad Ahmad Ibn; a.k.a. AWF, Awad Ibn; a.k.a. NAUF, Awad Mohammed Ahmed Ebni; a.k.a. OAF, Awad Mohamed Ahmed Ibn; a.k.a. OUF, Awad Mohamed Ahmed Ibn); DOB circa 1954; nationality Sudan; Head of Military Intelligence and Security (individual) [DARFUR]

31 companies

ADVANCED ENGINEERING WORKS, Street No. 53, P.O. Box 44690, Khartoum, Sudan [SUDAN]

ADVANCED MINING WORKS COMPANY LIMITED, Elmek Nimir Street, Khartoum Bahri/Industrial Area, P.O. Box 1034, Khartoum 11, Sudan; Email Address admico@sudanmail.net (Sudan) [SUDAN]

ADVANCED PETROLEUM COMPANY (a.k.a. APCO), House No. 10, Block 9, Street 33, Amarat, P.O. Box 12811, Khartoum, Sudan [SUDAN]

ADVANCED TRADING AND CHEMICAL WORKS COMPANY LIMITED (a.k.a. ADVANCED CHEMICAL WORKS; a.k.a. ADVANCED COMMERCIAL AND CHEMICAL WORKS COMPANY LIMITED), 19 Al Amarat Street, P.O. Box 44690, Khartoum, Sudan; Email Address advance@sudanmail.net (Sudan); alt. Email Address accw@htg-sdn.com (Sudan) [SUDAN]

AL SUNUT DEVELOPMENT COMPANY (a.k.a. ALSUNUT DEVELOPMENT COMPANY), No. 1 Block 5 East, Khartoum 2, P.O. Box 1840, Khartoum, Sudan; Website http://www.alsunut.com (Sudan); Email Address info.AlsunutKhartoum@alsunut.com; Email Address info.AlsunutDubai@alsunut.com [SUDAN]

ALFARACHEM COMPANY LIMITED (a.k.a. AL PHARAKIM; a.k.a. ALFARACHEM PHARMACEUTICALS INDUSTRIES LIMITED; a.k.a. ALFARAKIM), 27 Al Amarat Street, Khartoum, Sudan [SUDAN]

ARAB SUDANESE BLUE NILE AGRICULTURAL COMPANY, Khartoum, Sudan [SUDAN]

ARAB SUDANESE SEED COMPANY, Khartoum, Sudan [SUDAN]

ARAB SUDANESE VEGETABLE OIL COMPANY, Khartoum, Sudan [SUDAN]

ASSALAYA SUGAR COMPANY LIMITED, Eastern Bank of White Nile River, near Rabak town (about 300 km from Khartoum, P.O. Box 511, Khartoum, Sudan [SUDAN]

AZZA AIR TRANSPORT COMPANY LTD. (a.k.a. AZZA AVIATION COMPANY; a.k.a. AZZA TRANSPORT), German Culture Center, McNimer Street, P. O. Box 11586, Khartoum, Sudan [DARFUR]

BASHAIER, Khartoum, Sudan [SUDAN]

GIAD AUTOMOTIVE INDUSTRY COMPANY LIMITED (a.k.a. GIAD AUTOMOTIVE AND TRUCK; a.k.a. GIAD AUTOMOTIVE COMPANY; a.k.a. GIAD CARS & HEAVY TRUCKS COMPANY), Gazera State (40 km distance from Khartoum), P.O. Box 444/13600, Khartoum 1111, Sudan; Website http://www.giadmotors.com/giad_auto.html [SUDAN]

GIAD MOTOR INDUSTRY COMPANY LIMITED (a.k.a. GIAD MOTOR COMPANY), Basheer Mohammad Saeed Building, Baladia Street, P.O. Box 13610, Khartoum, Sudan; Website http://www.giadmotors.com (Sudan) [SUDAN]

GUNEID SUGAR COMPANY LIMITED (a.k.a. GUNEID SUGAR FACTORY), P.O. Box 511, Khartoum, Sudan [SUDAN]

HI TECH GROUP (a.k.a. HIGH TECH GROUP; a.k.a. HIGHTECH GROUP; a.k.a. HITECH GROUP), Amarat Street No. 31, P.O. Box 44690, Khartoum, Sudan; Website http://www.htg-sdn.com (Sudan) [SUDAN]

HICOM (a.k.a. HI-COM), Khartoum, Sudan [SUDAN]

HICONSULT (a.k.a. HI-CONSULT), Khartoum, Sudan [SUDAN]

HI-TECH CHEMICALS, Khartoum, Sudan [SUDAN]

HI-TECH PETROLEUM GROUP, Khartoum, Sudan [SUDAN]

NEW HALFA SUGAR FACTORY COMPANY LIMITED (a.k.a. NEW HALFA SUGAR COMPANY), El Gamaa Street (Aljama Street), New Halfa, P.O. Box 511/3047, Khartoum, Sudan; Email Address sukar@sudanmail.net (Sudan) [SUDAN]

PETROHELP PETROLEUM COMPANY LIMITED, Building No. 20, Street No. 42, Al Riyadh Area, P.O. Box 44690, Khartoum, Sudan [SUDAN]

RAM ENERGY COMPANY LIMITED, Altiyadh Street 131/Almashtal Street, Block 12, House No. 87, P.O. Box 802, Khartoum, Sudan [SUDAN]

SENNAR SUGAR COMPANY LIMITED, P.O. Box 511, Khartoum, Sudan; Email Address sukar@sudanmail.net (Sudan) [SUDAN]

SHEIKAN INSURANCE AND REINSURANCE COMPANY LIMITED (a.k.a. SHEIKAN INSURANCE COMPANY), Al Souq Al Arabi, Sheikan Building, Khartoum SU001, P.O. Box 10037, Khartoum, Sudan; Email Address sheikan@sudanmail.net (Sudan) [SUDAN]

SUDAN ADVANCED RAILWAYS, Khartoum, Sudan [SUDAN]

SUDAN GEZIRA BOARD (a.k.a. GEZIRA SCHEME), Khartum Gezira Scheme Building, 39th Street, P.O. Box 884, Khartoum, Sudan [SUDAN]

SUDAN MASTER TECHNOLOGY (a.k.a. GIAD INDUSTRIAL CITY; a.k.a. GIAD INDUSTRIAL GROUP; a.k.a. SUDAN MASTER TECH), SMT Building, Gamhuria Street, GIAD Industrial Complex, P.O. Box 10782, Khartoum, SU001, Sudan; Email Address info@sudanmaster.com (Sudan); Website http://www.sudanmaster.com (Sudan) [SUDAN]

SUDAN TELECOMMUNICATIONS COMPANY LIMITED (a.k.a. SUDATEL), 9th Floor, Sudatel Tower, Nile Street, Khartoum, Sudan; Sudatel Tower, Al Horriya Street, P.O. Box 11155, Khartoum, Sudan; Email Address info@sudatel.net (Sudan); Website http://www.sudatel.net/en (Sudan) [SUDAN]

SUDANESE SUGAR PRODUCTION COMPANY LIMITED (a.k.a. SUDANESE SUGAR COMPANY), El Gamaa Street (Aljama Street), Opposite the Authority of Electricity Building, P.O. Box 511, Khartoum, Sudan; P.O. Box 511, Building No. 3-Block No. 7, Alshatte Gharb-Gammaa Avenue, Khartoum, Sudan; Email Address sukar@sudanmail.net (Sudan) [SUDAN]

WAFRA PHARMA LABORATORIES (a.k.a. WAFRA PHARMACEUTICALS; a.k.a. WAFRAPHARMA LABORATORIES), Main Street, P.O. Box 2032, Omdurman, Sudan; Email Address waframed@sudanmail.net (Sudan) [SUDAN]

Bush tightens sanctions on Sudan over Darfur

WASHINGTON, May 29 (Reuters) – President George W. Bush imposed new U.S. sanctions on Sudan on Tuesday and sought support for an international arms embargo out of frustration at Sudan’s refusal to end what he called a genocide in Darfur.

“The people of Darfur are crying out for help, and they deserve it,” Bush said.

Accusing the Sudanese government of obstructing U.N. efforts to bring peace to Darfur, Bush said the U.S. Treasury Department will bar 31 companies controlled by Sudan from doing business in the U.S. financial system.

The companies targeted included firms in Sudan’s booming oil business and one that has been transporting weapons to the Sudanese government and militia forces in Darfur.

Bush also imposed economic sanctions on four Sudanese individuals, including two senior Sudanese officials and a rebel leader suspected of involvement in the Darfur violence.

Khartoum criticized the sanctions before they were even formally announced.

“I think these sanctions are not justified. It is not timely. We are cooperating well with the United Nations,” Mutrif Siddig, Sudanese undersecretary for foreign affairs, told Reuters in Khartoum.

The ratcheting up of U.S. pressure coincides with a broader effort by U.N. officials to get Sudan to end the conflict in which more than 200,000 people have died and 2 million have been driven from their homes since 2003. Khartoum says 9,000 have died and rejects accusations of genocide.

Bush directed U.S. Secretary of State Condoleezza Rice to consult with Britain and other allies on pursuing new U.N. Security Council sanctions against Sudan that would impose an expanded arms embargo on Sudan’s government.

“It will prohibit the Sudanese government from conducting any offensive military flights over Darfur. It will strengthen our ability to monitor and report any violations,” Bush said.

U.N. REACTION

China, a major consumer of Sudan’s oil, was skeptical. In Beijing, China’s representative on African affairs, Liu Guijin, said: “Expanding sanctions can only make the problem more difficult to resolve.”

U.N. Secretary-General Ban Ki-moon, who has been talking to Sudanese leaders, refused to comment directly on the sanctions but indicated they may interfere with his consultations with Sudanese leaders. “I need some more time,” he said.

Russia and South Africa were also wary such action would stop violence in Darfur. South Africa’s U.N. Ambassador Dumisani Kumalo urged patience and questioned the timing because of Ban’s talks, saying “It’s not clear which way we are going.”

But the European Union expressed a willingness to discuss tougher sanctions. “We are open to consider that,” EU foreign policy chief Javier Solana said at an EU meeting in Hamburg.

Andrew Natsios, the U.S. special envoy for Darfur, told reporters China may be more sympathetic to the U.S. position than its public statements suggest.

“We have many indications that the Chinese position is evolving. They have been much more helpful than may be apparent publicly,” Natsios said.

Bush has expressed frustration at the international community’s inability to force Sudan to stop attacks by Arab militias widely believed to be supported by the government.

He had wanted to announce the new sanctions six weeks ago but was convinced to let U.N. Secretary-General Ban Ki Moon have more time to conduct diplomacy.

Bush urged Sudan’s president, Omar Hassan al-Bashir, to let international peacekeepers into Darfur. Bashir has stalled for months in accepting U.N. packages to support an African Union peacekeeping force of 7,000 that are seen as a prelude to a larger hybrid force of more than 23,000 troops and police.

Democratic lawmakers generally supported Bush’s move but called it too late.

“The president’s announcement imposing new sanctions on Sudan is a dollar short and months late,” said California Democratic Rep. Tom Lantos, chairman of the House of Representatives Foreign Affairs Committee.

New York-based Human Rights Watch urged the U.N. Security Council and European Union to impose sanctions on Sudan.

“Concerted multilateral action is urgently needed to compel the Sudanese government to end its abusive polices in Darfur and accept the immediate deployment of the full AU-UN protection force,” said Peter Takirambudde, Africa director of Human Rights Watch.