Author: Dr. Angelika Hellweger
1 June 2023
3 min read
Angelika Hellweger outlines the background to the United States’ first sanctions linked to the fighting in Sudan between the Sudanese Armed Forces (SAF) and Rapid Support Forces (RSF) that erupted in April 2023.
The United States has imposed the first sanctions relating to the ongoing conflict in Sudan.
Announcing the sanctions, the US said it would “hold accountable” all those who undermine peace in the African country.
The sanctions target two companies associated with the Sudanese Armed Forces (SAF) and another two others that have links with the paramilitary Rapid Support Forces (RSF). The conflict in Sudan has been sparked by fighting between the SAF and RSF, which began in April as both sides looked to control the state and its resources. The fighting has killed hundreds and forced more than 1.3 million people to leave their homes.
The White House has also said it is imposing visa restrictions “against actors who are perpetuating the violence” but has not specified who these people are.
US National Security Adviser Jake Sullivan said: “Despite a ceasefire agreement, senseless violence has continued across the country – hindering the delivery of humanitarian assistance and hurting those who need it most.
“The scope and scale of the bloodshed in Khartoum and Darfur, in particular, is appalling.”
The US sanctions have targeted companies controlled by RSF chief Mohamed Hamdan “Hemedti” Dagalo that are based in the United Arab Emirates and the Sudanese capital Khartoum, and two defence firms with links to the SAF, which is led by General Abdel Fattah al-Burhan. The aim is to cut the flow of finance to both sides in the armed struggle so they lack the means to keep waging war.
The sanctions come after a number of ceasefire deals have failed to stop the fighting, with talks breaking down between the two warring parties. The US has said its aim is to reduce the violence before working to achieve a permanent end to the fighting and return the country to civilian rule.
The US sanctions come after years of ill feeling between the US and Sudan, which began when the Sudanese military removed President Omar al-Bashir from power in 2019, after 20 years running the country. The US and Sudan re-established diplomatic ties in mid-2020. But in 2021, Sudan’s military staged a coup against Prime Minister Abdalla Hamdok’s civilian government.
It is critically important that companies understand whether their business partners are somehow linked to the current conflict. The fact that the risk of gross human rights abuses is heightened in conflict-affected areas means that due diligence by businesses should be heightened accordingly.
Individuals and businesses operating in Sudan, those having supply chain connections to Sudan and those working with Sudanese companies connected to the SAF and RSF all need to conduct heightened due diligence in order to avoid their business undertakings contributing to human rights abuses, forced labour, terrorist financing and corruption and bribery. They must also ensure they are complying with anti-money laundering obligations.
Sudan is one of the largest gold producers on the continent. The industry constitutes Sudan’s foremost source of hard currency since the secession of South Sudan in 2011 and the resulting loss of oilfields. As a result, special attention needs to be paid to this sector. As the formal system for legal exports of gold from Sudan has collapsed, looting of gold from mining sites, markets, banks and other locations is occurring, Sudanese gold should, therefore, be considered a mineral from a conflict-affected area.
Businesses and individuals engaging in commerce involving gold that may be mined or processed in Sudan – or exported from there - are well advised to adopt practices in line with the OECD Due Diligence Guidance (OECD DDG) on Responsible Supply Chains of Minerals from Conflict Affected and High Risk Areas. There are also significant risks of gold being used as a vehicle for money laundering during the period of conflict, particularly by criminal elements seeking to take advantage of the instability and by actors involved in the conflict attempting to finance their activities. Gold dealers and retailers as well as financial institutions have AML/CFT compliance requirements – and these should be reviewed carefully, with appropriate analysis and assessment of the possible elevated risks relating to Sudan.
Angelika is a specialist in international, high-level economic crime investigations and large-scale commercial disputes. She has widely-recognised expertise in representing corporates and conglomerates in Europe, the Middle East, Africa and United States.