Addis Ababa — As the West is putting heavy pressure on the government of Sudan, in protest to the violence in Darfur, a small transaction of 2.5 million dollars between Ethiopian and Sudanese companies has been kept on hold since November 2006, due to sanctions by the United States' Treasury Department against Sudanese Petroleum Corporation (SPC).

Western countries, particularly the United States and the United Kingdom, blame an Arab-militia in Sudan a.k.a Janjaweed, for the fight that is believed to have left 1.8 million people homeless in Darfur, in what the UN is calling "the world's worst humanitarian crisis." The Sudanese government denies that it is backing the Janjaweed.

President Bush signed last week legislation that enables him to impose a series of sanctions against Sudan, including travel bans on its leaders and freezing officials and companies' assets. The US Treasury has long listed SPC on its sanction list, thus making it impossible for the Commercial Bank of Ethiopia (CBE) to transfer the 2.5 million dollar payment for SPC, through its correspondent bank, Citibank of New York.

The state-owned Ethiopian Petroleum Enterprise (EPE) buys nearly 80pc of the 150,000tns motor gasoline regular (benzene) from SPC. This has been the case since the two companies signed a deal in 2003. Ethiopia also imports close to half of the 110,000tns of liquefied Petroleum Gas (RPG) that is used in the country.

"Ethiopia buys benzene from Sudan because it gets it cheaper there than any other oil producing country," a senior official from the Ministry of Trade and Industry stated. "Although we reserve the right to pick a country from where we buy our merchandise, we also use currency of a country that has the right to stop us using its money for international transactions."

CBE officials are now exploring various options on how to fulfil the nation's commitment to its neighbouring supplier.

"We could use other currencies than the US dollar to conduct the transaction," a senior manager told Fortune. "This, however, could potentially upset our long-term relationship with Citibank, where we have been doing major international transaction for decades."

Citibank does make foreign currency available for the CBE, whenever the latter is in critical need. Two years ago, it had advanced 50 million dollars with a 2.5pc interest rate; CBE completed servicing its debt last month. Citibank has shown interest to advance twice this amount whenever CBE is ready to use the facility, according to sources.

"We need to sort this business with SPC out even to take advantage of this new offer," said the senior official.

According to reliable sources, CBE's management has yet to bring the problem to the attention of the Board of Directors, chaired by Abay Tsehaye, special advisor to the Prime Minister on pubic mobilization. The management, however, hopes that the problem could be resolved with the intervention of the Ministry of Foreign Affairs, according to sources.

Officials at the Ministry of Trade and Industry see the EPE as the inevitable greatest victim of this development. Officials of the latter were not available for comment.

An official from the Ministry believes considering the settlement of the outstanding bill through grains or other primary commodities could be a viable option.