Sudan Sanctions and D/P Collection: Can the Payment Be Routed Through Another Bank?

Introduction

A practical question has arisen concerning a D/P (Documents against Payment) collection involving goods of Sudanese origin. The goods—watermelon seeds—were shipped from Sudan and have already arrived at customs. The importer intends to make payment in AED to the beneficiary in Dubai.

The collecting bank received an MT199 from Mashreq Bank New York setting out its sanctions and internal compliance restrictions, including an express statement that transactions involving Sudan will not be processed.

Question

Dear Sir,

Hope you are in good spirits.

Need your expert opinion in the following scenario.

Recently we received MT199 from Mashreq Bank New York which has indicated various countries including Sudan under US sanctioned jurisdiction and Mashreq Bank New York’s own internal compliance and risks.

Now we need to make a DAP payment in AED currency for import of watermelon seeds to a beneficiary. The product is of Sudan origin and the loading port is from Sudan itself.

So can we make this payment to the beneficiary in Dubai through Mashreq or can we route the payment from another bank?

I have attached the MT199 sent from Mashreq for your review. I just want to know if we can make the payment for the goods that have already reached our customs.

Please provide your expert opinion on the overall Sudan sanctions and this scenario.

Thank you.

Suraj

_____

Answer

Dear Suraj,

Thank you for your question.

I understand that the payment is to be made under a D/P (Documents against Payment) collection.

Having reviewed the MT199, Mashreq Bank New York expressly states that it will not process transactions involving Sudan, in addition to transactions restricted under its internal compliance policies.

Therefore, the collection/payment should not be routed through Mashreq Bank New York.

The seller may consider using another bank as the remitting bank, provided that bank is willing to handle the transaction after its own sanctions/compliance assessment. Simply changing the payment route does not, however, remove the sanctions issue.

Likewise, your bank may refuse to act as collecting bank if its own sanctions/compliance policy does not permit transactions involving Sudan.

The fact that the goods have already arrived at customs does not, by itself, remove the sanctions/compliance considerations.

This is my practical view from a trade-finance perspective, rather than a legal opinion on sanctions.

Best regards,

Mr. Old Man