On March 22, 2018, the US Department of Commerce’s Bureau of Industry and Security (“BIS”) issued a final rule [Docket No. 180227219-8219-01] (the “Final Rule”) adding, in relevant part, 15 South Sudanese entities to the Export Administration Regulations’ (“EAR”) Entity List — a step that increases the pressure on that country following the US Government’s imposition of an arms embargo last month. All 15 entities are subject to a license requirement for all exports, reexports, or in-country transfers of items subject to the EAR, and new license applications for these entities are subject to a presumption of denial.
The entities are as follows:
- Ascom Sudd Operating Company;
- Dar Petroleum Operating Company;
- Greater Pioneer Operating Co. Ltd;
- Juba Petrotech Technical Services Ltd;
- Nile Delta Petroleum Company;
- Nile Drilling and Services Company;
- Nile Petroleum Corporation;
- Nyakek and Sons;
- Oranto Petroleum;
- Safinat Group;
- SIPET Engineering and Consultancy Services;
- South Sudan Ministry of Mining;
- South Sudan Ministry of Petroleum; and
- Sudd Petroleum Operating Co.
These entities are government, parastatal, and private companies involved in oil-related activities that have contributed to the ongoing crisis in South Sudan. According to statements issued by BIS and the US Department of State, the 15 designated entities are a source of substantial revenue for the Government of South Sudan that it uses to purchase weapons and fund militias undermining the peace, security, and stability of South Sudan. The designations are intended to ensure that items subject to the EAR are not used to generate revenue for the Government of South Sudan and thus indirectly finance the continuing violence in that country.
These designations follow the February 2018 amendments to the International Traffic in Arms Regulations (“ITAR”) to impose an arms embargo against South Sudan. The ITAR amendments updated the US Government’s defense trade policy toward South Sudan by applying a policy of denial to all exports and reexports of defense articles or services to South Sudan. A case-by-case review policy applies in limited circumstances, including where the defense articles are (a) for peacekeeping operations, (b) intended for use by the African Regional Task Force or United Nations, (c) intended for use by non-governmental organizations in furtherance of certain conventional weapons destruction activities, (d) non-lethal defense articles for humanitarian use, (e) personal protective equipment, or (f) provided in support of certain South Sudanese peace agreements.
In addition to the South Sudanese entities, the final rule adds 7 Pakistani and 1 Singaporean entity who have been determined by the U.S. Government to be acting contrary to the national security or foreign policy interests of the United States. This rule also removes one person under the destination of Ecuador and one person under the destination of the United Arab Emirates (U.A.E.) from the Entity List. Both removals are the result of requests for removal received by BIS pursuant to the section of the EAR used for requesting removal or modification of an Entity List entry and a review of information provided in the removal requests. Lastly, this rule corrects the license requirement for twelve entities that were added under the destination of Russia as part of a recent BIS rule.