VZCZCXRO6107
OO RUEHGI RUEHMA RUEHROV RUEHTRO
DE RUEHKH #0451/01 0910853
ZNR UUUUU ZZH
O 010853Z APR 09
FM AMEMBASSY KHARTOUM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3412
INFO RUCNFUR/DARFUR COLLECTIVE
RUEHGG/UN SECURITY COUNCIL COLLECTIVE
RHMFISS/CJTF HOA

UNCLAS SECTION 01 OF 03 KHARTOUM 000451 
 
DEPT FOR SE GRATION, S/USSES, AF A A/S CARTER, AF/C, IO, PRM 
NSC FOR MGAVIN AND CHUDSON 
DEPT PLS PASS USAID FOR AFR/SUDAN, USAID/W DCHA SUDAN 
ADDIS ABABA ALSO FOR USAU 
 
SENSITIVE 
AIDAC 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EAID ASEC PGOV PREL PREF KDEM KPKO SOCI AU UNSC
SU 
SUBJECT: USAID EXPLORES NEW APPROACH FOR GOS-USAID COOPERATION IN 
DEVELOPMENT ASSISTANCE IN NORTHERN SUDAN TO SUPPORT THE CPA 
 
REFS:  A. KHARTOUM 386 
¶B. KHARTOUM 428 
¶C. KHARTOUM 440 
 
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SUMMARY 
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¶1. (U) SUMMARY.  On March 26, USAID Mission Director and USAID Legal 
Advisor met with Government of National Unity (GNU) Undersecretary 
of the Ministry of International Cooperation (MIC), Elfatih Ali 
Siddig to resume dialogue between USAID and MIC regarding programs 
on which the two agencies can collaborate, and to discuss some 
specific topics related to election assistance and the Three Areas. 
Elfatih agreed that MIC could facilitate USAID programs under the 
1958 Economic, Technical and Related Assistance Agreement between 
the United States of America and the Sudan.  Elfatih also discussed 
his view regarding the jurisdiction of the Humanitarian Aid 
Commission (HAC) in the Three Areas and expressed MIC interest in 
working with USAID on election assistance in the north. END SUMMARY. 
 
 
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PROPOSED STRUCTURE FOR A USAID/MIC AGREEMENT 
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¶2. (U) On March 26, USAID Mission Director and Legal Advisor met 
with GoS MIC Undersecretary, Elfatih Ali Siddig to discuss 
procedures under which USAID could work through MIC to undertake 
development programs in northern Sudan in support of the CPA. (NOTE: 
USAID is exploring alternatives to NGO registration and cooperation 
solely through HAC.  MIC offers a potential new path for development 
assistance that may allow USAID to avoid some of the risks that it 
has encountered with HAC, such as seizure of equipment, control over 
the hiring of local staff, etc. END NOTE.)  Elfatih suggested that 
USAID and MIC could work within a simple framework of cooperation 
that could begin with a broad memorandum of understanding, followed 
by more detailed project-by-project USAID-MIC implementation 
protocols, with specific reference to any implementing company.  He 
stated USAID needs to be as transparent as possible to allay 
politicians' concerns. 
 
¶3. (U) Elfatih indicated that there are two options available for 
donors to work in Sudan.  First, provide funds to NGOs that are 
registered with, and have direct technical agreements with, the HAC. 
 Second, provide funds to non-NGO implementing companies for 
agreed-upon development activities under the auspices of an 
agreement between the donor and MIC.  Elfatih suggested the two 
sides agree on a simple MOU that would recognize the 1958 bilateral 
assistance agreement and state that the terms of the bilateral cover 
the projects (e.g. tax exemption, duty free imports, etc.) 
implemented under USAID-MIC agreements. 
 
¶4. (U) Elfatih emphasized that even with a MIC agreement, NGOs are 
required to register with HAC because the Organization of Voluntary 
and Humanitarian Work Act of 2006 (the NGO law) gives HAC authority 
over all NGOs, not just those doing humanitarian work.  Elfatih 
confirmed that even NGOs doing only development work would have to 
register with HAC. (NOTE:  There may be some room for non-profit 
501(c)3 organizations to come in under a MIC agreement, if there is 
another way to classify them.  This would not work for any 
organization already registered with HAC or otherwise working in the 
country outside of a specific agreement with MIC. END NOTE.) 
 
¶5. (U) Companies entering Sudan only for the purpose of implementing 
a project under USAID's agreement with MIC would not have to 
register at all.  Instead, they could acquire a  "legal personality" 
that would allow them to sign leases, open bank accounts, hire 
staff, etc., This legal status would derive from the project 
document or "implementation protocol" between USAID and MIC. 
 
¶6. (U) Elfatih suggested the idea of the recently expelled NGOs 
registering under another name.  For example, HAC told Elfatih that 
PADCO would be able to work again if they registered under another 
name, but that they would have to re-register with HAC - they could 
not come in as a company under a USAID-MIC agreement.  PADCO would 
be granted "fast track" registration and could complete the process 
in a day, he said.  He offered to accompany a PADCO representative 
to meet with Ministry of Humanitarian Affairs State Minister Ahmed 
Harun.  (NOTE: At first Elfatih said the "expelled NGOs" could 
register under another name and resume working.  Later in the 
conversation he said that while he was sure this would apply to 
 
KHARTOUM 00000451  002 OF 003 
 
 
PADCO, it might not apply to the others.  END NOTE.) 
 
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MIC AS A PARTNER FOR ELECTIONS ASSISTANCE IN THE NORTH 
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¶7. (U) USAID discussed plans to provide elections assistance and 
specifically raised the International Foundation for Elections 
Systems (IFES) as an organization that would extend direct 
assistance to the National Election Commission (NEC) to support 
national elections.  USAID stated IFES is not political, but rather 
addresses the nuts and bolt of conducting an election.  Elfatih 
stated that an agreement could be reached to allow IFES to work with 
the NEC, and indicated USAID would need to finalize a project 
document with MIC. (NOTE: USAID is in the process of drafting an 
implementation protocol for IFES assistance to the NEC.  END NOTE). 
 
 
¶8.  (U) Once the two parties have agreed, the Implementation 
Protocol would go to the Ministry of Finance to process customs 
duties, income tax and VAT tax exemptions.  Elfatih mentioned the 
idea of a steering committee to manage it, but did not go into 
further detail.  When USAID mentioned IFES is a foundation, Elfatih 
replied he thought there would be a way to classify it as something 
other than an NGO.  It was not clear whether IFES would necessarily 
have to identify itself as a specific type of entity as long as it 
had no other activities in Sudan.  He discussed the multi-donor fund 
that operates through UNDP and will support the NEC and civic 
education. He suggested USAID could participate in the multi-donor 
fund policy committee without contributing directly to the fund by 
virtue of our assistance to the NEC through IFES. 
 
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ASSISTANCE IN THE THREE AREAS AND NGO EXPULSIONS 
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¶7. (U) In a short discussion on the Three Areas (ref. A), Elfatih 
stated emphatically that they are part of the North and HAC has 
authority in all of the Three Areas.  The Southern Sudan Relief and 
Rehabilitation Commission (SSRRC) sent a letter to UNMIS and UNOCHA 
dated March 12 stating that "all NGOs and Humanitarian Agencies that 
are operating in both Southern Sudan and the Three Areas should 
continue their work as usual . . ."  According to Elfatih, the SSRRC 
has only a consultative capacity in the Three Areas under the terms 
of the CPA and does not have jurisdiction over NGOs working there. 
He stated SSRRC acted outside of its authority by sending a letter 
inviting expelled NGOs to continue working there.  He also 
emphasized that the National Intelligence and Security Service 
(NISS) is  authorized to operate throughout the Three Areas and has 
the authority to arrest anyone there without proper documentation. 
USAID questioned whether the concurrent authority in the CPA does 
not give the Blue Nile and Southern Kordofan states the authority to 
enter into their own agreements with NGOs and companies.  Elfatih 
replied the concurrent authority would not cover anything that was 
funded by bilateral assistance.  He explained that the states could 
receive private investment, but not bilateral donor funding.  The 
CPA only grants that authority to the GNU and the GOSS 
 
¶8. (U) Regarding the severance payments for local employees of the 
expelled NGOs demanded by HAC (refs. B and C), Elfatih stated it is 
the jurisdiction of the Ministry of Labor (MOL), not HAC, and he was 
surprised to hear that HAC was involved at all in the issue of 
severance pay.  He seemed surprised by the requirement that the 
expelled NGOs pay an additional six months of severance pay to their 
national staffs.  He indicated that severance pay should be a matter 
between the NGOs as employers and the Ministry of Labor.  He 
suggested that the NGOs appeal directly to the Ministry of Labor. 
 
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COMMENT 
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¶9. (SBU) This initial approach offers a prospect for supporting 
development programs to northern Sudan through an agreement between 
the MIC and USAID, as an alternative to HAC's intrusive control of 
its programs through solely HAC-NGO technical agreements with little 
role for donors.  It remains to be seen, however, whether such an 
arrangement will result in concrete improvements for implementing 
partners' freedom of movement, access to all areas of Sudan, and 
ability to meet USG requirements regarding asset disposition.  The 
GOS is expert at manipulating all agreements to its advantage and 
blocking access by organizations that it perceives threaten its 
 
KHARTOUM 00000451  003 OF 003 
 
 
control and political power in any way. Both MIC and HAC are parts 
of that same regime.  It also remains to be seen whether MIC will 
agree only to seemingly non-controversial assistance programs that 
directly benefit the GoS, such as IFES elections assistance, or 
whether MIC will also agree to programs that focus on civil-society 
capacity building and others that could be perceived as threatening 
the political status quo.  USAID is starting with IFES under this 
new bilateral cooperation approach and will go from there. 
 
FERNANDEZ