OFAC Amendment — Terrorism List Governments Sanctions Regulations: Sudan SST Rescission Implementation

Mechanism

The Terrorism List Governments Sanctions Regulations (TLGSR), 31 CFR Part 596, implement Section 321 of the Antiterrorism and Effective Death Penalty Act of 1996 (AEDPA), which prohibits U.S. financial institutions from engaging in financial transactions with the governments of countries designated as State Sponsors of Terrorism (SST) by the Secretary of State.

Sudan was added to the SST list in 1993 and had remained on it for 27 years, meaning U.S. banks and financial institutions were prohibited from processing any payments to or from the Sudanese government without an OFAC license. Section 596.506 additionally required specific OFAC licensing for exports of agricultural commodities, medicine, and medical devices to Sudan — a layer that duplicated (and was stricter than) the general humanitarian trade licensing regime for non-SST programs.

The Secretary of State rescinded Sudan's SST designation on December 14, 2020, as part of the U.S.-brokered normalization of Sudan-Israel relations under the Abraham Accords framework. Sudan's removal was conditioned on: 1. Sudan's agreement to pay $335 million in compensation to American victims of the 1998 U.S. Embassy bombings in Nairobi and Dar es Salaam (for which al-Qaeda operatives operating from Sudan were held responsible). 2. Sudan's formal commitment to not provide support to terrorist organizations.

This OFAC final rule, published May 20, 2021, gives the December 14, 2020 SST rescission its regulatory expression in the CFR: it removes the Sudan-specific prohibitions from the TLGSR text. OFAC invoked the 5 U.S.C. 553(d)(1) exception to publish the rule effective on the date of publication without a 30-day delay, as the rule relieves a restriction rather than imposing one.

What the rule changes in the TLGSR (31 CFR Part 596):

• §596.505 amendment: Removes "Government of Sudan" and "Sudanese nationals" from the

enumerated list of governments whose nationals are covered by the TLGSR financial-transaction prohibition.

• §596.506 deletion: Eliminates the section requiring OFAC-licensed treatment of agricultural

commodities, medicine, and medical devices destined for Sudan. These exports to Sudan may now proceed under the same general licensing framework applicable to non-SST jurisdictions.

What remains:

• The Darfur Sanctions Regulations (now Sudan Stabilization Sanctions Regulations, 31 CFR Part 546)

continue in full force — this action has no effect on those Darfur/Sudan-crisis designations.

• Sudan remains subject to country-program SDN entries under other executive orders.
• The remaining TLGSR text continues to cover the other active SST-designated states (Iran, North Korea,

Syria, Cuba as of this filing date).

Downstream implications

• U.S. financial institutions no longer need TLGSR-specific authorizations to process transactions

with the Sudanese government; general AML/compliance controls apply.

• Agricultural and pharmaceutical exporters to Sudan are no longer required to obtain a specific

OFAC license under §596.506, reducing compliance friction for humanitarian trade flows.

• This action represents a meaningful easing of the US-Sudan economic relationship, though the

broader DFC investment prohibition and Darfur SDN designations continued to constrain capital flows.

• Sudan's SST removal was a key condition enabling the U.S. International Development Finance

Corporation (DFC) to eventually consider Sudan-country-program financing.

Open questions

• Whether the $335 million compensation payment was fully completed and how it was structured

(lump sum vs. installments; U.S. victims trust fund mechanics).

• Whether subsequent Sudan political developments (October 2021 military coup; April 2023 civil

war) have affected U.S. willingness to fully normalize financial relations despite the TLGSR amendment remaining in place.