The Office of Foreign Assets Control (”OFAC”) announced expanded sanctions today against Sudan and added three individuals and thirty-one Sudanese companies to the SDN list. Doing business with these companies was already prohibited by the Sudanese Sanctions Regulations. The effect of the designations means that any funds of the newly-designated companies or individuals must be blocked when they come under the control of U.S. companies and individuals.

It’s always hard to anticipate the effect of such blocking. Certainly U.S. financial institutions have systems in place that will catch these funds should the newly-designated companies attempt to utilize those institutions. But other U.S. companies without such controls may well continue to provide services to the Sudanese SDNs.

Take IX Web Hosting, for example. IX hosts a number of websites on its servers in Hopkinsville, Kentucky. One of the websites hosted by IX Web Hosting just happens to be the website of Advanced Petroleum Company in Khartoum, one of the newly-designated SDNs. Of couse, such hosting already violated Section 538.205 of the Sudanese Sanctions Regulations (unless IX Web Hosting can somehow claim that it had no idea it was providing web-hosting to a company in Sudan). Under the new sanctions, if IX Web Hosting receives any hosting fees from Advanced Petroleum it will now have to block them.

We’ve noted on a number of occasions that the Internet poses unique challenges for sanctions compliance, challenges which a number of companies haven’t even begun to address. So how long before the Advanced Petroleum website disappears?