SUDAN
Summary

Sanctions

UN, EU Financial and Arms

FAFT AML Deficient

No longer on FATF list

Higher Risk Areas

 

Compliance with FATF 40 + 9 Recommendations

Supporter of / Safe Haven for International Terrorism

Not on EU White list equivalent jurisdictions

Corruption Index (Transparency International & W.G.I.)

World Governance Indicators (Average Score)

Failed States Index (Political Issues)(Average Score)

Offshore Finance Centre

Medium Risk Areas

Weakness in Government Legislation to combat Money Laundering

 

 

ANTI-MONEY LAUNDERING

 

FATF Status

Sudan is on the FATF List of Countries that have been identified as having strategic AML deficiencies

 

Latest FATF Statement - 23 October 2015

The FATF welcomes Sudan’s significant progress in improving its AML/CFT regime and notes that Sudan has established the legal and regulatory framework to meet its commitments in its action plan regarding the strategic deficiencies that the FATF had identified in February 2010. Sudan is therefore no longer subject to the FATF’s monitoring process under its on-going global AML/CFT compliance process. Sudan will work with MENAFATF as it continues to address the full range of AML/CFT issues identified in its mutual evaluation report.

 

Compliance with FATF Recommendations

The last Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Sudan was undertaken by the Financial Action Task Force (FATF) in 2013. According to that Evaluation, Thailand was deemed Compliant for 0 and Largely Compliant for 4 of the FATF 40 + 9 Recommendations. It was Partially Compliant or Non-Compliant for 5 of the 6 Core Recommendations.

 

US Department of State Money Laundering assessment (INCSR)

Sudan was deemed a “Monitored” Jurisdiction by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR).

Key Findings from the report are as follows: -

 

Sudan has been designated a State Sponsor of Terrorism by the United States. In November 1997, the United States imposed comprehensive economic, trade, and financial sanctions against Sudan, which have limited Sudan’s access to international financial markets and banking institutions. Following the Treasury Department’s fine and penalties on BNP Paribas in 2014, most banks in Saudi Arabia, the Arab Gulf states, and Europe ceased processing financial transactions from Sudan or with Sudanese banks.

The trafficking of narcotics is a source of concern, especially with the increase of smuggling operations across the extended land and sea borders of Sudan. Traders and legitimate business persons often carry large sums of cash because Sudan is largely a cash-based society and electronic transfer of money outside of Sudan is challenging. This dependence on cash complicates enforcement and makes Sudan’s banking system vulnerable to money laundering. Sudan is vulnerable to trade-based money laundering. Corruption is widespread in government and commerce and facilitates criminal activity and money laundering.

Sudan has two free trade zones (FTZs) and plans to open a border trade zone with Chad. Preliminary agreements are in the works with China, Eritrea, and Ethiopia for additional FTZs. There are no known money laundering or terrorism financing activities through these zones.

 

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SANCTIONS

The UN, and the EU have imposed an arms embargo against Sudan and there are restrictions against the supply of technical, financial and other assistance related to military activities.

 

The Arab League (comprising 22 Arab member states), of which this country is a member, has approved imposing sanctions on Syria. These include: -

-      Cutting off transactions with the Syrian central bank

-      Halting funding by Arab governments for projects in Syria

-      A ban on senior Syrian officials travelling to other Arab countries

-      A freeze on assets related to President Bashar al-Assad's government

The declaration also calls on Arab central banks to monitor transfers to Syria, with the exception of remittances from Syrians abroad.

 

The Arab League has also boycotted Israel in a systematic effort to isolate Israel economically in support of the Palestinians, however, the implementation of the boycott has varied over time among member states. There are three tiers to the boycott. The primary boycott prohibits the importation of Israeli-origin goods and services into boycotting countries. The secondary boycott prohibits individuals, as well as private and public sector firms and organizations, in member countries from engaging in business with any entity that does business in Israel. The Arab League maintains a blacklist of such firms. The tertiary boycott prohibits any entity in a member country from doing business with a company or individual that has business dealings with U.S. or other firms on the Arab League blacklist.

 

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BRIBERY & CORRUPTION

 

Index

Rating (100-Good / 0-Bad)

Transparency International Corruption Index

14

World Governance Indicator – Control of Corruption

2

 

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INVESTMENT CLIMATE

Sudan is an extremely poor country that has experienced protracted social conflict, civil war, and, in July 2011, the loss of three-quarters of its oil production due to the secession of South Sudan. The oil sector had driven much of Sudan's GDP growth since 1999. For nearly a decade, the economy boomed on the back of rising oil production, high oil prices, and significant inflows of foreign direct investment. Since the economic shock of South Sudan's secession, Sudan has struggled to stabilize its economy and make up for the loss of foreign exchange earnings. The interruption of oil production in South Sudan in 2012 for over a year and the consequent loss of oil transit fees further exacerbated the fragile state of Sudan’s economy. Sudan is also subject to comprehensive US sanctions. Sudan is attempting to develop non-oil sources of revenues, such as gold mining, while carrying out an austerity program to reduce expenditures. The world’s largest exporter of gum Arabic, Sudan produces 75-80% of the world’s total output. Agriculture continues to employ 80% of the work force. Sudan introduced a new currency, still called the Sudanese pound, following South Sudan's secession, but the value of the currency has fallen since its introduction. Khartoum formally devalued the currency in June 2012, when it passed austerity measures that included gradually repealing fuel subsidies. Sudan also faces rising inflation, which reached 47% on an annual basis in November 2012, but subsided to 25% in 2013. Ongoing conflicts in Southern Kordofan, Darfur, and the Blue Nile states, lack of basic infrastructure in large areas, and reliance by much of the population on subsistence agriculture keep close to half of the population at or below the poverty line.

 

 

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