EU Urged to Escalate Financial Pressure on Warring Leaders in Sudan

New report details plan for united international action and targeted sanctions as millions face ethnic cleansing and conflict-driven starvation

July 29, 2024 (Brussels) – A new report by The Sentry spotlights how the European Union (EU), with considerable leverage in Sudan via aid, trade, and migration, can escalate actions to help bring an end to the devastating civil war.

More than a year since the start of the conflict, as hostilities continue to escalate, the response of the international community has been insufficient. Ethnic cleansing has been reported, and Sudan is now home to the largest displaced population in the world, with millions at risk of death due to starvation.

Anrike Visser, Senior Advisor for Illicit Finance Policy at The Sentry, said: “The EU must take a strong and united stance against the leaders who put their personal and financial interests above the well-being of Sudan. The EU urgently needs to ramp up the pressure to help end the conflict. So far, the response of the international community is highly insufficient to influence the leaders to end the war. The financial pressure needs to be stepped up significantly to match the scale and urgency of the crisis unfolding in Sudan.”

Although the EU swiftly condemned the violence and has dedicated significant amounts of aid together with its member states, The Sentry report details how the EU has lagged in its response to the conflict compared to the US and the UK, has not done enough to block the dirty money feeding the conflict, and has not gone far enough in holding to account the individuals principally responsible for the fighting.

John Prendergast, Co-Founder of The Sentry, said: “For the two parties to the conflict, protecting their significant economic interests is paramount; in fact, it is what they are fighting over. Therefore, undermining these financial incentives and means of funding of the conflict is a crucial avenue to speed up the path towards peace and transition to civilian rule.”

The warring powers in Sudan, the Rapid Support Forces (RSF) and the Sudanese Armed Forces (SAF), are fighting to retain their power and control over economic interests that span vast parts of the economy. The RSF, and especially the family of General Mohamed Hamdan Dagalo, or “Hemedti,” has accumulated a significant commercial empire, with interests in mining, construction, agriculture, real estate, and procurement. The SAF also operates or is involved in extensive commercial holdings stemming from the Bashir era in weapons manufacturing, construction, automotive, hospitality, and pharmaceuticals.

Selected excerpts:

• Both the RSF and SAF have accumulated a wide range of economic interests, and both parties have repeatedly rejected civilian oversight of these interests, which range from gold mining to construction and hospitality. The desire to maintain control of these is partly driving the conflict, while the money earned is funding it.
• By avoiding members of the Dagalo family who control companies funding the RSF, as well as RSF top leadership outside of Darfur, the EU sanctions place less pressure directly on Hemedti to sincerely negotiate a return to peace. The EU did, however, designate the Dubai-based financial advisor of the RSF, Mustafa Ibrahim Abdel Nabi Mohamed, who serves as the director of al-Khaleej Bank, which is 60% owned by companies associated with family members of Hemedti. The EU did not sanction those family companies or the associated family members.
• As with the RSF, the EU has targeted the SAF’s economic interests by sanctioning the general director of Defense Industries System, SAF officer Lieutenant General Mirghani Idriss Suleiman. Here again, the EU steers clear of several former high-ranking SAF officials on the national level and instead targets individuals responsible for civilian harm or for enhancing the SAF’s fighting capabilities.
• To properly motivate the RSF and SAF to end the fighting and engage in peace negotiations, all the high-ranking national leaders need to experience the financial consequences of their actions. The EU should immediately impose targeted network sanctions on the as yet unsanctioned high-ranking RSF and SAF officials at the national level and on their corporate networks and enablers.
• The EU risks partially undermining the financial pressure imposed by the US on top national leaders responsible for the fighting and exposing the European financial system to sanction circumvention efforts. Improved sanctions efforts targeting the main national leadership and the remaining gaps with entities sanctioned by the US and UK, better coordination, the issuance of advisories, and the assessment of the country in light of the EU and the Financial Action Task Force (FATF) grey lists would contribute to closing existing loopholes and helping to bring the warring parties to the negotiation table.
• Right now, there are various steps that the EU can take to close the gap and impose consequences for those national leaders involved in undermining peace or committing atrocities. These include more closely coordinating with partners in the US and other jurisdictions for future designations; targeting all the individuals involved in the violence, especially those that are already sanctioned by other jurisdictions; naming the subsidiaries of already sanctioned companies; and communicating clearly about the challenges and goals of the sanctions designations.
• For sanctions to be effective, they should have clear objectives, be ramped up over time, and be imposed in lock step with other jurisdictions. Although the EU has taken some action condemning the violence and supporting monitoring efforts, the main national leaders responsible for the violence have not faced serious financial consequences from the EU, nor have their family members who are linked to companies funding the conflict.
• The use of a full range of more robust tools of financial pressure on RSF and SAF top leadership and their enablers would allow the EU to help create desperately needed leverage for the struggling mediation efforts. Additional sanctions should be enacted to target the domestic and international proxies, enablers, companies, and subsidiaries facilitating the ongoing human rights abuses, as well as the trade in arms and gold essential to sustaining the fighting. The EU—along with the FATF—should add Sudan to its list of high-risk third countries that have strategic deficiencies in their anti-money laundering and countering the financing of terrorism (AML/CFT) regimes in order to help reduce the risk of illicit funds entering the EU financial system. It should also issue warnings to EU companies in the form of business and bank advisories.

Read the full report: https://thesentry.org/reports/european-union-sudan/

 

For media inquiries or interview requests, please contact: Greg Hittelman, Director of Communications, [email protected]

 

About The Sentry
(Short descriptor for press use: “The Sentry, an investigative organization that tracks corruption”)

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. Learn more: www.TheSentry.org