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Cablegate: Sudan Sanctions: Telecoms Company Again Presses

VZCZCXYZ0006
PP RUEHWEB

DE RUEHKH #1522 2701442
ZNR UUUUU ZZH
P 271442Z SEP 07
FM AMEMBASSY KHARTOUM
TO SECSTATE WASHDC PRIORITY 8658

UNCLAS KHARTOUM 001522

SIPDIS

SIPDIS

DEPARTMENT FOR AF/SPG AND EEB/ESC/ESP
DEPARTMENT PLEASE PASS TREASURY FOR OFAC

E.O. 12958: N/A
TAGS: ECON ETRD PREL SU
SUBJECT: SUDAN SANCTIONS: TELECOMS COMPANY AGAIN PRESSES
FOR DELISTING

REF: KHARTOUM 1333

1. This is an action request ) see para. 8.

2. Summary: Executives of Sudanese telecoms company SUDATEL
have repeated their request for information as to what action
the company might take to be delisted as a Specially
Designated National (SDN). They also provided additional
insights on how U.S. economic sanctions are affecting
operations. Other aspects of the meeting will be reported
septel. End summary.

3. During a September 26 meeting, top executives of Sudan
Telecommunications Company, Ltd. (SUDATEL) restated their
desire that the company be delisted from U.S. economic
sanctions imposed on May 29. SUDATEL CEO Emad Osman recalled
Chief Commercial Officer Ihab Osman,s earlier meeting at the
Embassy (reftel), at which Osman had pressed for delisting
and had requested guidance on what actions the company might
take to escape SDN status.

4. SUDATEL executives appear honestly bewildered at why
their company has been included on the SDN list. They
emphasized that theirs is the only firm providing telecom
services to Darfur, including for humanitarian relief
agencies. They also said that the GoS has no commercial or
operational control over the company.

5. According to Ahmed, although the GoS is the largest
single owner of SUDATEL stock, it has gradually but steadily
reduced its holdings from 60 percent since privatization of
the telecoms sector began in 1991 and currently controls 23
percent. Ahmed stated that the GoS plans to continue to
gradually sell off stock over time. The GoS seeks to
maximize its return and decides when and how many shares to
sell based on market conditions. GoS sales also are
constrained by its desire not to depress stock prices by
selling too many shares at one time. They insisted that
there is no GoS level of control over SUDATEL. Two out of 12
corporate directors represent the GoS.

6. SUDATEL executives reiterated that they will take
whatever action is required by the USG to be removed from the
SDN list. Econoffs offered to forward to Washington any
specific queries from SUDATEL.

7. Asked about how U.S. sanctions have affected SUDATEL
operations, they replied that SDN status impedes all of the
company,s financial transactions. In addition, sanctions
impede SUDATEL,s purchase of new equipment. Since the
imposition of the U.S. trade embargo on Sudan in 1997, the
company has had to restrict itself to acquiring equipment
with no more than 10 percent U.S. content. However, with the
listing of SUDATEL as an SDN, even non-U.S. suppliers have
become wary of dealing with the company.

8. Action requested: Post seeks Washington guidance on how
to respond to SUDATEL,s inquiry.
FERNANDEZ

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