Aug 14, 2024

Dirty Money Is Destroying Sudan

Sudan is in the midst of a civil war fueled by deep divisions between the Sudanese Armed Forces (SAF) and the Rapid Support Forces (RSF). Decades of political unrest and violence, particularly in the early 2000s, have worsened the situation, highlighted by the 2003 Darfur conflict, which resulted in 300,000 deaths and millions displaced. Regional turmoil, including Egypt’s 2011 and 2013 coups and Libya’s 2011 uprising, has further destabilized Sudan.

The broader region, including South Sudan and the Central African Republic (CAR), has faced similar conflicts, with South Sudan’s civil war leading to over 400,000 deaths since 2013 and Chad’s instability exacerbated by ongoing regional conflicts. Weak governance and poor law enforcement have enabled radical groups like Boko Haram in Nigeria to arm themselves, causing widespread harm to civilians.

One of the driving forces behind Sudan’s civil war is the flow of dirty money from illegal activities like gold smuggling, arms trafficking, and resource exploitation. Reports suggest that about 90% of Sudan’s gold is smuggled abroad, often to places like Dubai. These trades fund weapons, ammunition, and military operations, further entrenching the conflict by supporting logistics and bribery to secure smuggling routes. (I’ll add a link here to support the claim)

How can we stop the flow of dirty money that’s fueling Sudan’s civil war? More targeted sanctions would be a good first step. For instance, the U.S. sanctioned companies like Al Junaid in 2021 for gold smuggling linked to the RSF. Global cooperation is also vital. This includes the U.S.-UAE effort to freeze warlords’ assets. Banks like HSBC and financial analysts are also crucial. They monitor suspicious transactions and use advanced analytics to detect illicit activities. Their work has uncovered significant illegal networks.

Several red flags could indicate illicit financial activities, including spikes in transactions for precious metals, connections to RSF or SAF entities, and transactions routed through countries with weak anti-money laundering controls or jurisdictions that border conflict zones. By focusing on these indicators, banks can more effectively stop dirty money from fueling Sudan’s conflict.

FATF has placed Sudan under increased monitoring due to deficiencies in its anti-money laundering (AML) and counter-terrorism financing (CFT) frameworks. Sudan’s involvement in illicit activities, particularly in the gold trade, exacerbates these issues. FATF has urged Sudan to tighten its AML/CFT framework, improve regulations, and enhance international cooperation to address these challenges. FATF may incentivize the country to do something, but they have to focus on the war tearing their country apart. The global compliance community can help by staying vigilant and reporting these instances to their relevant authorities.

For the people of Sudan. We can support them by reaching out to humanitarian groups like Médecins Sans FrontièresUNICEF and the International Rescue Committee. These groups are vital for aiding conflict victims. You can donate or spread the word to help. But if you can’t donate, you can help raise awareness through social media, educate yourself and others, and volunteer your time or skills to support advocacy efforts

For the analysts out there, be sure to take that extra step and fully understand relevant KYC/B information on the individuals or companies you’re investigating, who they transact with, and if those interactions make sense for them. You’ll never know what details you might uncover with that one extra check.

Companies like Fairmined can provide more education and traceability to verify the origins of precious metals. Check them out.

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