Press Release / / 03.14.22

New report: Threats of Russian access to assets, corruption in Africa

US Needs New Strategy and Urgent Action to Counter Corruption, Threat of Russian Access to Illicit Assets in Africa

Report Details Anti-Corruption Measures Critical to Safeguard the Continent From Becoming a Russian Lifeline in Evading International Sanctions

March 14, 2022 (Washington, DC) – Urgent action is needed by the US government to counter threats of illicit asset flows from Africa, including by Russian proxies that have established pathways to potentially evade international financial sanctions, warns a new report released today by The Sentry.

Justyna Gudzowska, Director of Illicit Finance Policy at The Sentry and report author, said: “With anti-corruption reforms in Africa stagnant at best, now is the time for the US government to double down on its efforts to counter the violent kleptocracies on the continent. The US government already has a myriad of financial pressure tools at its disposal that it could wield much more effectively than it has in the past. During this Year of Action following the Summit for Democracy, the US urgently needs to work with partner countries, civil society, and private sector actors (inside and outside Africa) and deploy a multi-faceted, whole-of-government strategy to change the incentive structure of those benefiting from entrenched corruption and atrocities.”

A Reinvigorated US Anti-Corruption Strategy for Africa” details critical steps that the US can take to strengthen its anti-corruption strategy in Africa. Previous investigative reporting by The Sentry has shown how rampant corruption in several African nations has created a breeding ground for criminal networks, sanctions evaders, smugglers, suspected terrorist financiers, and mercenaries such as the Kremlin-linked Wagner Group. Resource-rich kleptocracies provide an attractive refuge for these bad actors from around the globe, making combating corruption in the African theater a pressing matter of national and international security.

John Prendergast, Co-Founder of The Sentry, said: “We have already seen Russia successfully expand its foothold in Africa, angling for resources in the Central African Republic, Sudan, and Libya, among others. Unchecked kleptocracies on the continent make attractive hosts for malign actors. As more financial avenues are closed off to Russia, it is critical that Africa does not become one of Russia’s lifelines.”

The report comes in the wake of the Biden-Harris administration’s renewed focus on anti-corruption initiatives and focuses on policy areas where the US and its partners can improve their efforts in the fight against key networks that enable kleptocracies in Africa. Ultimately, combatting corruption on the continent will provide better leverage for efforts at promoting democracy, peace, human rights, and broader good governance.

A reinvigorated US policy should include a creative mix of financial policy tools that must also be coupled with clear policy goals, robust diplomacy, and a fresh approach to the private sector.

The Sentry’s recommendations include (Read complete recommendations in the full report):

  • Network sanctions: In order to be effective, sanctions should not be one-off, punitive gestures, and they should go beyond naming and shaming warlords and officials to focus on exerting pressure on entire networks. The Sentry believes that Global Magnitsky sanctions should be used more often and should be considered before setting up new country-based sanctions regimes.
  • Anti-money laundering advisories: AML advisories from the Financial Crimes Enforcement Network (FinCEN) are an under-utilized tool.  The US government should consider issuing them more frequently to counter illicit financial flows related to the continent. 
  • Multi-agency business advisories: The increased use of multi-agency business advisories, which communicate the potential legal and reputational risks of continuing to engage in certain business activities without enhanced due diligence, is a welcome development. The US government should combine them with responsible investing reporting requirements and issue them with respect to certain sectors and countries in Africa. 
  • Technical assistance and capacity building: The US government should prioritize technical assistance and capacity building to support domestic and regional efforts to counter corruption and money laundering in the banking system, and should enlist partners such as the UK, EU, World Bank, IMF, African Union, and the United Nations Office on Drugs and Crime to support local financial regulatory and supervisory bodies.
  • Greater collaboration and multilateralization: Anti-corruption efforts will be dramatically enhanced if the US works closely with its partners in Africa and other international allies, and to truly confront the problem, regional financial centers need to join the fight.
  • Political engagement and diplomatic pressure: Financial pressures are only effective over the long term when they create leverage to support diplomatic efforts aimed at achieving particular foreign policy goals. As such, sanctions and other recommended tools must be accompanied by a renewed diplomatic strategy to counter kleptocratic networks in Africa that includes senior-level political engagement.
  • Private sector engagement: The US government should include the objective of thwarting corruption in Africa as part of its regular outreach to private sector stakeholders, and it should also focus on promoting financial inclusion by managing the financial crime risks of doing business in Africa.

Read the full report: https://thesentry.org/reports/us-anti-corruption-strategy-africa/

Additional resources from The Sentry for news coverage:

For media inquiries or interview requests, please contact: Greg Hittelman, Director of Communications, gh@thesentry.org

 

About The Sentry

The Sentry is an investigative and policy organization that seeks to disable multinational predatory networks that benefit from violent conflict, repression, and kleptocracy.

Pull back the curtain on wars, mass atrocities, and other human rights abuses, and you’ll find grand corruption and unchecked greed. These tragedies persist because the perpetrators rarely face meaningful consequences. The Sentry aims to alter the warped incentive structures that continually undermine peace and good governance. Our investigations follow the money as it is laundered from war zones to financial centers around the world. We provide evidence and strategies for governments, banks, and law enforcement to hold the perpetrators and enablers of violence and corruption to account. These efforts provide new leverage for human rights, peace, and anti-corruption efforts.

Co-founded by George Clooney and John Prendergast, The Sentry is a strategic partner of the Clooney Foundation for Justice. Learn more at www.TheSentry.org.