US sanctions on Sudan are far reaching and must be lifted

Photo: Andrew Heavens is a reporter and photographer who has worked with Reuters since 2005, first from Addis Ababa, Ethiopia and now Khartoum, Sudan. His African career followed 10 years of reporting for newspapers in Britain and the United States. (Reuters)

In the following story, he recounts his experience of U.S. economic sanctions on the country whose president Omar Hassan al-Bashir is accused of masterminding human rights abuses in Darfur.

WITNESS: Battling to borrow money in sanctions-hit Sudan

By Andrew Heavens, 04 July 2009

KHARTOUM (Reuters) - The United States achieved at least three things when it stepped up economic sanctions on Sudan: it banned most trade between the two countries, froze Sudanese assets and closed the door on my British mortgage.

Trade sanctions are presented as sophisticated instruments -- ways of forcing change in foreign governments without resorting to war. But in today's inter-connected world, economic penalties designed to hit one country can quickly spread beyond their original target.

"We can't open a mortgage account with your address in Khartoum," the officer from Bank of Scotland International told me over the crackling phone line. "It's on our list of sanctioned countries."

A journalist from Britain, I was trying hard not to sound too desperate. We had already been turned down by two other lenders without explanation. My family's dreams of buying a little semi-detached corner of England -- somewhere to spend our holidays back home from Khartoum -- were fading.

"But I'm British and I want to buy a house in Britain," I told the bank official, with the slightest note of pleading in my voice. "We haven't imposed any trade sanctions on Sudan. It's only America."

The bank official was sympathetic, but there was nothing he could do. "If there are sanctions imposed from another country, from a risk point of view we can't get involved either."

FALL FOUL

The key word there was risk.

In theory, the United States and its organs only have the power to stop U.S. citizens and companies doing business with another country.

In practice, non-U.S. companies can still fall foul of the sanctions administered and enforced by the U.S. Treasury's Office of Foreign Assets Control (OFAC).

Take the tale of Lloyds TSB, part of the London-based group which also owns one of the banks that turned me down, Bank of Scotland International.

In January Lloyds agreed to forfeit $350 million to U.S. authorities in connection with charges its staff had faked records so clients from Sudan and other sanctioned countries could do business with the U.S. banking system.

According to a research note from international law firm Cleary Gottleib, it was the first case of its kind, involving the U.S. Department of Justice punishing sanctions violations by "a non-U.S. person."

Lloyds spokeswoman Sara Evans confirmed Bank of Scotland had a policy of not providing mortgage accounts to customers who live in Sudan, and other banks have been quick to follow the precedent.

An OFAC report in January said it was aware of a number of "third country" banks that had started cutting ties with Sudan and shutting down accounts of customers living in Sudan.

"Sudan also is facing apprehension from foreign firms about staying in the country under the threat of further U.S. and multilateral sanctions and the growing influence of divestment campaigns," read the report to the U.S. Congress.

NO VISA

On the ground in Khartoum, the effects of the restrictions have been frustrating, if sporadic.

The worst hit are the millions of "ordinary" Sudanese citizens who have had nothing to do with the alleged human rights abuses that sparked the main wave of U.S. trade sanctions in 1997, or the Darfur conflict, which provoked tougher restrictions in 2006.

Everything from getting hold of dollars to wiring cash abroad is a grind. Day-to-day transactions are handled with big bundles of bank notes -- Visa and other U.S. electronic payment companies do not operate in Sudan.

Back to my own sorry financial affairs, there was the time I was trying to clear a cheque from a U.S. account to a bank in Malaysia. (Don't ask -- life can get very complicated here.)

The accountant had attached a brief explanatory note to the transaction: "Payment for Sudan rent."

The cheque was blocked.

Then there was the payment a South African newspaper wanted to send me, again with "Sudan" in the transaction details. The British bank I have used for more than 25 years refused to accept it.

And then, again, there was my mortgage. Well, reader, I eventually got one. But I won't tell you who ended up agreeing to the deal, in case they're prompted to take another closer look at my personal records.

(Editing by Catherine Bosley and Sara Ledwith)