The United States is targeting South Sudan's state-owned oil company, its oil and mining ministries and a dozen other oil-related entities in an attempt to stem the financial flow fuelling the country's civil war.
South Sudan's government and "corrupt official actors" are using the revenue to purchase weapons, fund militias and undermine peace, the State Department said in a statement Wednesday.
This is the latest attempt to hold accountable those accused of blocking the path to an end to the five-year conflict, which has created Africa's fastest-growing refugee crisis since the Rwandan genocide in 1994.
The U.S. earlier imposed an arms embargo on South Sudan. "We remain prepared to take additional actions" including more sanctions, State Department spokeswoman Heather Nauert said.
South Sudan's government responded angrily. The U.S. "is trying to destroy South Sudan's economy and shut down the oil. It's an attempt to oust the government because they know our only source of revenue is oil," spokesman Michael Makuei told The Associated Press.
The list of entities was obtained by the AP. Their placement on the Department of Commerce's Entity List means the U.S. will impose a license requirement on all exports, re-exports and transfers of items coming from the United States.
"We cannot stand by while the government uses the country's resources to foment violence and war," Mark Weinberg, spokesman for the U.S. Embassy in South Sudan, told the AP.
The U.S. is the largest donor of humanitarian aid to South Sudan, but it urged the country's government not to "squander" the generosity.
Advocacy groups praised the new pressure on oil-rich South Sudan.
The U.S. announcement comes shortly after two reports by investigative groups that allege that South Sudan's state-owned oil company, Nile Petroleum, is spending millions of dollars to fund the civil war as well as militias accused of committing atrocities.
The U.S. should continue the strategy of increasing pressure on "the leaders and spoilers who have hijacked the oil sector, as well as on the networks that have allowed them to use oil revenue to finance the war, line their pockets, and move money abroad," said J.R. Mailey, special investigations director at The Sentry, one of the investigative groups.
Advocacy groups said the international community should play a stronger role in fighting the oil sector corruption that keeps the civil war going.
"International oil companies and commodity traders can play an important role in ensuring South Sudan's oil is traded on transparent terms and in accordance with the law," said Michael Gibb, campaign leader for conflict resources at Global Witness, which published the other recent report.