By Khalid Abdelaziz
KHARTOUM (Reuters) - Sudan has complied with all U.S. demands for lifting sanctions, it said on Tuesday, a day before the United States will decide whether to permanently lift 20-year restrictions that have hobbled the country's economy.
Former U.S. President Barack Obama temporarily lifted sanctions for six months in January, suspending a trade embargo, unfreezing assets and removing financial sanctions.
The U.S. State Department said on Tuesday the agency would announce a decision on Wednesday about whether to make the relief permanent. In June the United State said it was "very concerned" about Sudan's human rights record.
Washington will decide if Sudan has complied with demands that include resolving internal military conflicts in areas such as war-torn Darfur, cooperating on counter-terrorism and improving access to humanitarian aid.
"The natural and logical step is that America's economic sanctions are lifted from Sudan because Sudan has implemented what was asked of it entirely," Foreign Ministry Undersecretary Abdul Ghani al-Naim told Reuters.
"The two sides have had monthly joint meetings to follow up on implementation and there doesn't remain anything left to be done. Positive progress was achieved," Naim said.
Sudan this month extended a unilateral ceasefire until the end of October with rebels it has been at war with in the southern Kordofan, Blue Nile and Darfur regions.
Sudan is looking to win back access to the global banking system, potentially unlocking badly needed trade and foreign investment that could help it manage soaring inflation of 35 percent and a shortage of foreign currency that has hampered its ability to purchase from abroad.
The economy has been reeling ever since South Sudan, which contains three-quarters of former Sudan's oil wells, seceded in 2011.
The sanction relief would not change Sudan's designation by the United States as a state sponsor of terrorism, and President Omar Hassan al-Bashir remains wanted by the International Criminal Court for crimes against humanity.
This status could make investors and banks hesitant to do business, even if sanctions are lifted, said Magnus Taylor, a Sudan analyst at the International Crisis Group think-tank.
"There will be an economic impact but it won't be instantaneous," said Taylor. "It's the beginning of the process of normalisation."
Taylor said that it is likely, but not certain, that the United States will lift sanctions.
"The State Department wants it to happen and the people working on Sudan within the State Department want it to happen, but ultimately it's kind of a political decision after that," he said.
(Reporting by Khaled Abdelaziz; Additional reporting by Lisa Barrington and Eric Knecht in CAIRO and Yeganeh Torbati in WASHINGTON; Writing by Lisa Barrington; Editing by Jeremy Gaunt and Lisa Shumaker)