The Transitional Constitution of the Republic of the Sudan (2005)/PART THIRTEEN

CHAPTER I : GUIDING PRINCIPLES FOR EQUITABLE SHARING OF RESOURCES AND COMMON WEALTH
185 (1) Resources and common wealth of the Sudan shall be shared equitably to enable each level of government to discharge its legal and constitutional responsibilities and duties and to ensure that the quality of life, dignity and living conditions of all citizens are promoted without discrimination on grounds of gender, race, religion, political affiliation, ethnicity, language or region.

(2) The sharing and allocation of the resources and common wealth of the Sudan shall be based on the premise that all parts of the country are entitled to development.

(3) The National Government shall fulfil its obligations to provide financial transfers to the Government of Southern Sudan, and shall, except as otherwise provided herein, apportion revenues equitably among other states;

(4) The State recognizes that Southern Sudan, Southern Kordofan, Blue Nile, Abyei Area and other conflict affected areas face serious needs; they shall be enabled to perform basic government functions, establish civil administration, rehabilitate and reconstruct the social and physical infrastructure in a post-conflict Sudan.

(5) There shall be established a National Reconstruction and Development Fund and a Southern Sudan Reconstruction and Development Fund to bring up Southern Sudan, other conflict affected areas and the least developed areas to the national average level of socio-economic and public services standards.

(6) Revenue sharing shall reflect a commitment to devolution of powers and decentralisation of decision-making in regard to development, service delivery and governance.

(7) The development of infrastructure, human resources, sustainable economic growth and the capacity to meet human needs shall be conducted within a framework of transparent and accountable governance.

(8) The best known practices in the sustainable utilization and management of natural resources shall be adopted by the State.

(9) This Constitution sets out the various types of income, revenue, taxes and other sources of wealth to which the respective levels of government are entitled.

(10) All taxes and duties set out in this Constitution shall be regulated by law to ensure coordination, fairness, equity, transparency and to avoid excessive tax burden on the citizens, private sector and investors.

(11) No level of government shall withhold any allocation or financial transfers due to any other level of government. In case of dispute, any level of government, after attempting amicable solution, may initiate proceedings in the Constitutional Court and before Southern Sudan Supreme Court in the case of governments in Southern Sudan.

Land Regulation
186 (1) The regulation of land tenure, usage and exercise of rights thereon shall be a concurrent competence, exercised at the appropriate level of government.

(2) Rights in land owned by the Government of the Sudan shall be exercised through the appropriate or designated level of Government.

(3) All levels of government shall institute a process to progressively develop and amend the relevant laws to incorporate customary laws, practices, local heritage and international trends and practices.

National Land Commission
187 (1) Without prejudice to the jurisdiction of the courts, there shall be established a National Land Commission that shall have the following functions:

(a) arbitrate between willing contending parties on claims over land,

(b) entertain claims, at its discretion, in respect of land, be they against the relevant government or other parties interested in the land. The parties to the arbitration shall be bound by the decision of the Commission on the basis of mutual consent and upon registration of the award in a court of law,

(c) enforce the law applicable to the locality where the land is situated or such other law as the parties to the arbitration agree, including principles of equity,

(d) accept references on request from the relevant government or in the process of resolving claims, make recommendations to the appropriate level of government concerning land reform policies and recognition of customary rights or customary land law,

(e) assess appropriate land compensation including but not limited to monetary compensation, for applicants in the course of arbitration or in the course of a reference from a court,

(f) advise different levels of government on how to co-ordinate policies on national projects affecting land or land rights,

(g) study and record land use practices in areas where natural resource development occurs,

(h) conduct hearings and formulate its own rules of procedure,

(2) The National Land Commission shall be independent and representative of all levels of government.

(3) Membership, appointment, terms and conditions of service of the National Land Commission shall be regulated by law. The Chairperson of the National Land Commission shall be appointed by the President of the Republic with the consent of the First Vice President.

(4) The National Land Commission shall be accountable to the Presidency which shall approve the budget of the Commission.

Southern Sudan Land Commission
188 In accordance with this Constitution and without prejudice to the jurisdiction of the courts, there shall be established a Southern Sudan Land Commission which shall have the functions specified in the Comprehensive Peace Agreement and the Interim Constitution of Southern Sudan.

Cooperation between National and Southern Sudan Land Commissions
189 (1) The National Land Commission and Southern Sudan Land Commission shall co-operate and co-ordinate their activities so as to use their resources efficiently.

(2) The National Land Commission and the Southern Sudan Land Commission shall agree:-

(a) to exchange information and decisions of each other,

(b) on how to resolve conflict between their findings or recommendations.

(3) The Southern Sudan Land Commission may carry out certain functions of the National Land Commission, including collection of data and research.

(4) In the case of conflict between the findings or recommendations of the National Land Commission and Southern Sudan Land Commission which cannot be resolved or reconciled by agreement pursuant to sub-Article (2) (b ) above, the matter shall be referred to the Constitutional Court.

The Framework for Petroleum Management
190 The basis for a definitive framework for the management and development of the petroleum sector shall include:-

(a) sustainable utilization of oil as a non-renewable natural resource consistent with:-

(i) the national interest and the public good,

(ii) the interest of the affected states,

(iii) the interest of the local population in affected areas,

(iv) national environmental policies, biodiversity conservation guidelines and cultural heritage protection principles,

(b) empowerment of the appropriate levels of government to develop and manage, in consultation with the relevant communities, the various stages of oil production within the overall framework for the management of petroleum development,

(c) give due attention to enabling policy environment for the flow of foreign direct investment by reducing risks associated with uncertainties regarding the outcome of the referendum on self-determination at the end of the Interim Period,

(d) persons enjoying rights in land, shall be consulted and their views shall duly be taken into account in respect of decisions to develop subterranean natural resources from the area in which they have rights. They shall share in the benefits of that development,

(e) persons enjoying rights in land are entitled to equitable compensation on just terms arising from acquisition or development of land for the extraction of subterranean natural resources from the area in respect of which they have rights,

(f) the communities in whose areas development of subterranean natural resources occurs have the right to participate, through their respective states, in the negotiation of contracts for the development of those resources,

(g) regardless of the contention over the ownership of land and associated natural resources, there shall be a framework for the regulation and management of petroleum development in the Sudan during the Interim Period.

National Petroleum Commission
191 (1) An independent National Petroleum Commission shall be established and its decision shall be by consensus.

(2) The National Petroleum Commission shall be constituted as follows:-

(a) the President of the Republic and President of Government of Southern Sudan as co-chairs,

(b) four permanent members representing the National Government,

(c) four permanent members representing the Government of Southern Sudan,

(d) not more than three non-permanent members representing oil producing state or states in which petroleum development is being considered.

(3) The National Petroleum Commission shall have the following functions:-

(a) formulate public policies and guidelines in relation to the development and management of the petroleum sector,

(b) monitor and assess the implementation of the policies mentioned in (a) above; to ensure that they work in the best interests of the people of Sudan,

(c) develop strategies and programs for the petroleum sector,

(d) negotiate and approve all oil contracts for the exploration and development of oil in the Sudan, and ensure that they are consistent with its principles, policies and guidelines,

(e) develop its internal regulations and procedures.

(4) In performing the functions referred to in sub-Article (3) above, the National Petroleum Commission shall take into account relevant considerations, including the following:-

(a) the extent to which the contract provides benefits to local communities affected by the development,

(b) the extent to which the views of the state and the affected groups are incorporated in the proposed contracts,

(c) if the National Petroleum Commission decides to approve the contract, persons holding rights in land who are aggrieved by the decision shall seek relief through arbitration or in a court of law,

(d) if the non-permanent members of the National Petroleum Commission representing the oil producing state or states collectively disagree with the decision of the National Petroleum Commission to approve the contract related to their state/states, the National Minister in charge of petroleum shall not sign the contract and shall refer the matter to the Council of States. If the Council of States rejects the objection by two-thirds majority, the National Minister in charge of petroleum shall sign the contract. If the Council of States does not reject the objection by two-thirds majority within twenty four (24) sitting days of receiving it, the Council of States shall remit the objection within that period to a mechanism established by it with two-thirds majority to arbitrate on the objection. The arbitration decision shall be made within six calendar months of referral to arbitration. The arbitration decision shall be final and binding,

(e) if the National Petroleum Commission approves the contract, the National Minister responsible of Petroleum shall sign the contract on behalf of the Government of the Sudan,

(f) in performing functions (a), (b) and (c) of sub-Article (3) above, the National Petroleum Commission shall include only its permanent members,

(g) in performing function (d) of sub-Article (3) above, the National Petroleum Commission shall include, in addition to its permanent members, representatives of oil producing state or states in which contracts for the exploration and development of the petroleum are being negotiated and considered for approval.

Sharing Oil Revenue
192 (1) The framework for sharing wealth from the extraction of natural resources, emanating from Southern Sudan shall balance the needs for national development and reconstruction of Southern Sudan.

(2) Net revenue from oil shall be the sum of the net revenue:-

(a) from exports of government oil, and

(b) from deliveries of government oil to the local refineries.

(3) Exports shall be valued at the actual Free on Board export prices less the charges to deliver the oil to any export destination including pipeline and management charges. Oil delivered to the local refinery shall be valued at the average Free on Board export prices during the last calendar month in which there was an export sale less the charges that would have been incurred to deliver the oil to any export destination including pipeline and management charges.

(4) An Oil Revenue Stabilization Account shall be established from government oil net revenue derived from actual export sales above an agreed benchmark price. The benchmark price will be established annually as part of the national budget.

(5) At least two percent of oil revenue shall be allocated to the oil producing states in proportion to output produced in the state, without prejudice to the special arrangements of Abyei Area.

(6) After the payment to the Oil Revenue Stabilization Account and to the oil producing states, fifty percent of net oil revenue derived from oil producing wells in Southern Sudan shall be allocated to the Government of Southern Sudan as of the beginning of the pre-interim period and the remaining fifty percent to the National Government and states in Northern Sudan.

(7) A Future Generation Fund shall be established once national oil production reaches one million barrels per day.

(8) All funds and special accounts referred to in this Constitution and future accounts shall be on-budget operations in accordance with the public budget.

Sources of National Revenue
193 The National Government may legislate for raising revenue or collecting taxes from the following sources:-

(a) national personal income tax,

(b) corporate or business profit tax,

(c) custom duties and import taxes,

(d) sea-ports and airports revenue,

(e) service charges,

(f) oil revenues,

(g) national government enterprises and projects,

(h) grants and foreign financial assistance,

(i) value added tax or general sales tax or other retail taxes on goods and services,

(j) excise duties,

(k) loans, including borrowing from the Central Bank of Sudan and the public,

(l) any other tax as determined by law.

Sources of Southern Sudan Revenue
194 The Government of Southern Sudan may legislate for raising revenue or collecting taxes from the following sources:-

(a) the national revenue allocation to the Government of Southern Sudan and states from the National Revenue Fund as set out in Article 197 of this Constitution,

(b) revenue from any of the sources listed as state revenue sources referred to in Article 195 of this Constitution,

(c) oil revenues as set out in Article 192 of this Constitution,

(d) taxes of Southern Sudan Government, which do not encroach on the exclusive National Government taxing powers,

(e) service charges of Government of Southern Sudan,

(f) enterprises and projects of Government of Southern Sudan,

(g) grants-in-aid and foreign financial assistance,

(h) taxes and levies on small and medium businesses,

(i) excise duties on goods within Southern Sudan deemed to be luxury consumables,

(j) personal income tax of southern Sudan,

(k) loans and borrowing in accordance with Article 203 of this Constitution,

(l) any other taxes as may be determined by law.

Sources of States Revenue
195 The states may legislate for raising revenue or collecting taxes from the following sources:-

(a) state land and property tax and royalties,

(b) service charges for state services,

(c) licences,

(d) state personal income tax,

(e) levies on tourism,

(f) state share of oil revenue as is set out in Article 192(4) of this Constitution,

(g) state government projects and national parks,

(h) stamp duties,

(i) agricultural taxes,

(j) grants-in-aid and foreign aid,

(k) excise duties,

(l) border trade charges or levies in accordance with national legislation,

(m) other state taxes, which do not encroach on National or Southern Sudan Government taxes,

(n) loans and borrowing in accordance with Article 203 of this Constitution,

(o) any other tax as may be determined by law.

Southern Sudan Non-oil Revenue Allocation
196 (1) Notwithstanding the provisions of Articles 192, 193 and 194 herein, the National Government shall allocate fifty per cent of the national non-oil revenue collected in Southern Sudan, as provided for under Article 193 above, to the Government of Southern Sudan to partially meet the development costs during the interim period. This arrangement shall be reviewed, during the mid-term review, with the view to National Government allocating additional resources to the Government of Southern Sudan if need arises.

(2) The Government of Southern Sudan and states shall retain and dispose of such other income raised and collected under their own taxing powers.

National Revenue Fund
197 (1) All revenues collected nationally for or by the National Government shall be pooled in a National Revenue Fund administered by the National Treasury. Such Fund shall embrace all accounts and sub-funds, into which monies due to the Government are collected, reported or deposited.

(2) All the revenues and expenditures of the Government shall be on-budget operations and made public.

Fiscal and Financial Allocation and Monitoring Commission
198 (1) A Fiscal and Financial Allocation and Monitoring Commission shall be established, to ensure transparency and fairness both in regard to the allocation of nationally collected funds to the Government of Southern Sudan and the states.

(2) The Fiscal and Financial Allocation and Monitoring Commission shall undertake the following duties and responsibilities:-

(a) monitor and ensure that equalization grants from the National Revenue Fund are promptly transferred to respective levels of government,

(b) guarantee appropriate utilization and sharing of financial resources,

(c) ensure that revenues allocated to conflict affected areas are transferred in accordance with agreed formulae,

(d) safeguard transparency and fairness in the allocation of funds to the Government of Southern Sudan and the states according to established ratios or percentages stipulated in this Constitution.

(3) The Fiscal and Financial Allocation and Monitoring Commission shall be composed of representatives from the National Government and the Government of Southern Sudan and the states as follows:-

(a) three representatives of the national government,

(b) three representatives of Government of Southern Sudan,

(c) all finance ministers in all states of the Sudan.

(4) The Chairperson of the Fiscal and Financial Allocation and Monitoring Commission shall be appointed by the President of the Republic with the consent of the First Vice President.

(5) The Fiscal and Financial Allocation and Monitoring Commission shall set its rules and procedures, which shall be approved by the Presidency.

(6) The Fiscal and Financial Allocation and Monitoring Commission shall quarterly report to the Presidency about its analysis and findings, confirming that nationally collected funds are allocated according to sub-Article (2) above; without prejudice to Article 185 (10) of this Constitution, the Presidency shall take appropriate remedial action in case of failure by the National Treasury to discharge any of the functions stipulated in that Article.

National Reconstruction and Development Fund
199 There shall be established by the National Treasury, a National Reconstruction and Development Fund having the mission of developing the conflict affected areas and the least developed areas of Northern Sudan. It shall be managed by a committee with appropriate representation from such areas and a member of the Southern Sudan Ministry of Finance. A report on the income and expenditure for the projects supported by the Fund shall be tabled before the National Assembly and the Council of States.

Southern Sudan Reconstruction and Development Fund
200 (1) There shall be established a Southern Sudan Reconstruction and Development Fund to solicit, raise and collect funds from domestic and international donors and disburse such funds for the reconstruction, rehabilitation and construction of the infrastructure of Southern Sudan, for the resettlement and reintegration of internally and externally displaced persons, and to address past imbalances in regional development and infrastructure.

(2) A monitoring and evaluation system shall be established to ensure accountability, transparency, efficiency, equity and fairness in the utilization of resources.

(3) The Government of Southern Sudan shall be responsible for expenditure from the fund and shall be entitled to raise additional funds by way of donation from foreign States, multilateral organizations or other bodies for the purposes of the reconstruction and development of Southern Sudan states. The Fund shall be transparently administered and professionally managed subject to an oversight by Southern Sudan Assembly and a committee appointed by the Government of Southern Sudan but having on it a representative of the National Ministry of Finance and of the National Audit Chamber.

The Dual Banking System
201 (1) The Central Bank of Sudan shall be responsible for the formulation and conduct of monetary policy. All banking institutions shall be subject to rules and regulations set by the Central Bank of Sudan.

(2) A dual banking system shall be established, and shall consist of an Islamic banking system that shall operate in Northern Sudan and a conventional banking system to operate in southern Sudan.

(3) There shall be established the Bank of Southern Sudan as a branch of the Central Bank of Sudan to provide, inter alia, conventional banking services.

Restructuring and Management of the Central Bank of Sudan
202 (1) The Central Bank of Sudan shall be restructured so as to reflect the duality of the banking system in the Sudan. The Central Bank of Sudan shall use and develop two sets of banking instruments, one Islamic and the other Conventional, to regulate and supervise the implementation of a single monetary policy through:-

(a) an Islamic financing window in Northern Sudan under a Deputy Governor of the Central Bank of Sudan using Islamic financing instruments to implement the national monetary policy in Northern Sudan, and

(b) the Bank of Southern Sudan, headed by a Deputy Governor of the Central Bank of Sudan, to manage the conventional window using conventional financing instruments in implementing the same national monetary policy in southern Sudan.

(2) The primary responsibility and mandate of the Central Bank of Sudan shall be ensuring price stability, maintaining stable exchange rate, sound banking system and issuance of currency. The monetary policy shall rely primarily on market-based instruments instead of administrative allocation of credit.

(3) The Central Bank of Sudan shall be fully independent in its pursuit of monetary policy.

(4) There shall be established an independent Board of Directors for the Central Bank of Sudan, which shall be responsible to the Presidency. It shall consist of nine members as follows:-

(a) Governor of the Central Bank of Sudan, Chairperson,

(b) two Deputies, and

(c) six highly qualified Sudanese to be appointed by the President of the Republic in accordance with Article 58 (2) (c) herein.

(5) Decisions of Board of Directors on matters that may affect adversely the interests of the clientele of either banking window shall be by consensus.

(6) The Governor of the Central Bank of Sudan and his/her two Deputies shall be appointed by the President of the Republic in accordance with Article 58 (2) (c) herein. The Governor of the Central Bank of Sudan shall appoint, in consultation with the Board of Directors and his/her two Deputies, other senior officers within the Central Bank of Sudan.

(7) The Bank of Southern Sudan shall be responsible for chartering and supervising financial institutions in southern Sudan.

(8) All financial institutions shall be subject to internationally recognized regulatory and prudential standards for Islamic and conventional finance, as set by the Central Bank of Sudan.

(9) All financial institutions shall be bound to implement monetary policies set by the Central Bank of Sudan.

Government Borrowing
203 (1) The Government of Southern Sudan and the states may borrow money. Neither the National Government nor the Central Bank of Sudan shall be required or expected to guarantee borrowing by sub-national levels of government.

(2) The Government of Southern Sudan and all sub-national levels of government shall report financial and fiscal data to the relevant National Government bodies for statistical purposes.

(3) The Government of Southern Sudan and the states may borrow money from foreign sources based on their respective credit worthiness.

(4) Foreign borrowing by all sub-national levels of government shall be in a manner that does not undermine national macroeconomic policies and shall be consistent with the objective of maintaining external financial viability. All foreign borrowing transactions of sub-national levels of government shall conform to the Central Bank of Sudan specifications.

Accounting Procedures, Standards and Fiscal Accountability
204 (1) All levels of government shall comply with generally accepted accounting procedures, standards and fiscal accountability to ensure that public funds are allocated and expended according to the budget of such level of government.

(2) All levels of government shall hold all incomes and revenues received in public accounts and subject to public scrutiny and accountability.

(3) The accounting procedures, standards and fiscal accountability shall be regulated by law.

National and Southern Sudan Audit Chambers
205 (1) There shall be established an independent National and an independent Southern Sudan Audit Chambers.

(2) The National Audit Chamber shall set auditing standards for the whole country and supervise the financial performance of the national government, including revenue collection and expenditure, in accordance with the budgets approved by the national and state legislatures.

(3) The President of the Republic, with the approval of a two-thirds majority of the National Assembly shall appoint the National Auditor General from qualified professionals, who shall head the National Audit Chamber and shall take oath before the President of the Republic. The National Auditor General shall not be removed except in the same manner in which he/she is appointed.

(4) The National Audit Chamber shall assume auditing of the accounts of the National Executive, the National Legislature, the National Judiciary and the accounts of northern states, public institutions, corporations, companies and any other institutions as may be determined by law.

(5) The Auditor General shall present an annual report to the President of the Republic and the National Assembly.

(6) The National Auditor General shall be prohibited from engaging in all businesses in which constitutional office holders are not allowed to engage in pursuant to Article 75 of this Constitution.

(7) The Southern Sudan Audit Chamber shall be established according to the Southern Sudan Interim Constitution.

(8) The law shall organize the National and Southern Sudan Audit Chambers and shall specify the functions, terms and conditions of service of their employees.

CHAPTER VIII : INTERSTATE COMMERCE
206 (1) Free interstate commerce is guaranteed by this Constitution. No legislation shall impede interstate commerce, the flow of goods and services, capital or labour between the states.

(2) There shall be no levies or fees or any other charges on interstate trade.

New Currency
207 (1) The Central Bank of Sudan shall issue a new currency, the design of which shall reflect the cultural diversity of the Sudan.

(2) Until a new currency is issued on the recommendation of the Central Bank of Sudan, the circulating currencies in Southern Sudan shall be recognised.

Existing Oil Contracts
208 (1) The Sudan People's Liberation Movement representatives appointed to have access to all existing oil contracts, shall finish their functions and duties which are prescribed by the Comprehensive Peace Agreement as soon as practicable.

(2) The term "existing oil contracts" means contracts signed before the date of signature of the Comprehensive Peace Agreement.

(3) The existing oil contracts shall not be subject to re-negotiation.

(4) If existing oil contracts are deemed to have caused fundamental social consequences and environmental problems the National Government shall implement necessary remedial measures.

(5) Persons whose rights have been violated by existing oil contracts shall be entitled to compensation. Upon establishment of these violations through due legal process, the parties to the oil contracts shall be liable to compensate the affected persons to the extent of the damage caused.

Government Liabilities and Assets
209 (1) Any debt or liability incurred by any level of government shall be the responsibility of that level of government.

(2) There shall be a fair and equitable division of government assets. An asset shall in the first instance be allocated to the level of government responsible for the function in respect of which the asset is related. In the event of a dispute, such dispute shall be referred to a committee comprising a representative of each of the parties involved in the dispute and a mutually agreed expert. The decision of the committee shall be final and binding.