The United States has announced that it will rescind Sudan’s 27-year-old listing as a state sponsor of terrorism, a status that had restricted Khartoum’s economic links and cut it off from badly needed financial assistance.
Why was Sudan on the list?
The United States designated Sudan as a state sponsor of terrorism in 1993 on the grounds that Omar al-Bashir’s regime was supporting militant groups including Hamas and Hezbollah.
In the 1990s Sudan’s Islamist regime became a pariah, hosting Osama bin Laden and Carlos the Jackal, as well as visits from numerous high profile foreign Islamists.
Many Sudanese think Sudan’s listing alongside Syria, Iran and North Korea had long-since become outdated and undeserved.
Bashir cooperated with the United States on counter-terrorism after 9/11. He was toppled in April 2019 and Sudan is in transition under a military-civilian ruling council, with a government of technocrats.
What was the impact on Sudan?
The designation meant the United States could not give Sudan economic assistance, and effectively blocked financing or debt relief by the International Monetary Fund and the World Bank.
It also hampered dollar transactions for Sudanese businesses and complicated imports of some goods.
Even when US trade sanctions were lifted in 2017, foreign investment remained low and foreign banks reluctant to deal with Sudan as they tried to ensure compliance with sanctions.
What were the conditions to rescind the listing?
Conditions included counter-terrorism cooperation, improving religious freedom and expanding humanitarian access.
But the main sticking point was payment of compensation for the victims of attacks that the United States linked to Sudan, including al-Qaeda bombings on the USS Cole in 2000 and on the US embassies in Kenya and Tanzania in 1998.
After disagreement among victims and their families over fair compensation for the embassy bombings, a deal was eventually reached for Sudan to pay $335 million.
Sudanese officials say the money is ready and has been transferred, but the exact status of the funds has not been announced.
According to sources, the United States tried to use the prospect of delisting to pressure Sudan into normalizing relations with US ally Israel.
Sudanese government officials have insisted publicly that the two issues should be treated separately.
How is the designation lifted?
US President Donald Trump announced in a tweet that Sudan would be removed from the list. Once he notifies Congress, lawmakers have 45 days to review it, though they are unlikely to block the move.
As part of the settlement, Sudan is asking for restoration of its sovereign immunity, which Congress must also approve.
There has been resistance from several Congress members who say immunity could make it harder for 9/11 victims to sue Sudan.
Sudan’s removal from the state sponsors of terrorism list could proceed even without immediate agreement over sovereign immunity.
What could change for Sudan?
Sudanese officials say removal from the list is a big step that could help stabilize and revive its economy.
It should allow Sudan to rejoin international financial networks, boosting remittances, trade and investment flows, they say.
The Central Bank governor said Sudanese banks would start procedures to restore correspondent relations with external banks almost immediately.
The United States can also support clearance of Sudan’s debt arrears and back debt relief, helping it access more than $1 billion annually from international lenders, according to an advisor in Sudan’s finance ministry.
However, officials have also warned that the delisting is not a panacea, and that an economy plagued by deep and long-running problems will not be transformed overnight.
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