Sanctions Hit Sudan’s War Chest but More is Needed to End the Bloody Conflict

The war that erupted on April 15 between the Sudan Armed Forces (SAF) and the paramilitary Rapid Support Forces (RSF) is devastating Sudan and its people, killing thousands, displacing an estimated 2.8 million and exposing 25 million Sudanese to hunger. What both belligerents thought would be a lightning campaign has turned into drawn-out urban warfare that has already obliterated much of the country’s industrial, commercial, and infrastructural bases, concentrated in the capital, Khartoum. The war has rapidly spread out to half of Sudan’s eighteen federal states in the Darfur, Kordofan, and Blue Nile regions, where it has taken on an alarming ethnic turn as the SAF calls for civilian volunteer fighters from north-central Sudan to join its ranks, and the RSF sets in motion a massive mobilization of tribes in Darfur from which its fighters hail. The UN Secretary-General’s warning that Sudan is on the verge of a civil war must be heeded. 

To send a signal that continued fighting would have consequences for the belligerents, President Biden issued an Executive Order on May 4, authorizing his Administration to “hold individuals responsible for threatening the peace, security, and stability of Sudan; undermining Sudan’s democratic transition; using violence against civilians; or committing serious human rights abuses.” This is in line with the United States Government’s goals when imposing sanctions, which is to exert economic pressure and thus encourage a change in behavior from the targeted company or country. For decades the US has used sanctions to address issues such as human rights abuses, grand corruption, money laundering, terrorism financing, and disruption to democratization processes that the US government seeks to deter or penalize.

Warring parties fail to reach a ceasefire in US and Saudi brokered negotiations 

Interestingly, days after the warning, SAF’s Lt.-Gen. Abdul Fattah al-Burhan and RSF commander Mohamed Hamdan Dagalo (Hemeti)  agreed to the launch on May 6 of the Jeddah talks. The Jeddah talks are focused on securing a sustainable humanitarian ceasefire to allow the delivery of desperately needed supplies and create safe passages for civilians. Frustrating the US and Saudi mediators, the belligerents agreed to, but failed to fully uphold, successive ceasefires. This blocked the process from moving to deployment of ceasefire monitors and separation of forces, and political talks involving civic and political actors to chart a path to democratic transition. 

A day after SAF pulled out of the talks, the US on June 1 imposed travel sanctions on unnamed officials of the warring parties and their domestic backers. More significantly, the Treasury Department blacklisted SAF’s Defense Industries System (DIS), of which the SAF general commander chairs the board of directors, and Sudan Master Technology (SMT), a weapons manufacturing enterprise with shares in the DIS. By targeting DIS, a conglomerate overseeing more than two hundred companies manufacturing weapons and producing civilian products and services, the U.S. also signaled concern about the stranglehold that public companies controlled by security agencies have maintained over the national economy for the past three decades. The U.S. also sanctioned two companies owned by RSF commanders: Al Junaid for Multi Activities, a holding company with half a dozen subsidiaries, including in gold producing and trade, and Tradive, incorporated in the United Arab Emirates and used to purchase weapons and over 1,000 dual use vehicles for the RSF. 

The DIS’s military manufacturing capacity would allow the SAF to continue to supply itself with small and medium weapons and the armored vehicles and small aircrafts, which it produces, to fight the ongoing war. The DIS also controls many civilian enterprises that dominate the economy, including in telecommunications, pharmaceutical, manufacturing, construction, and commodity trading sectors. SAF top generals serve on the board of directors and in senior management roles of the DIS and its subsidiaries, thus securing them considerable financial gains and in-kind benefits. By contrast, family members of the RSF’s commander Hemeti, for their part, leveraged their growing security and political clout, during Omar al-Bashir’s regime and after its fall, to incorporate private companies of which they control the majority of shares, which in turn supply, for profit, much of the RSF procurement and logistical needs, including in arms, construction, and transportation. 

Sanctions on companies could hit war chests or fighting parties 

The implications of the blacklisting of individuals and the four corporations respectively by the US State Department and the Treasury Department’s Office of Foreign Assets Control (OFAC), are serious. However, accounts freezes and visa denials of individuals who most likely do not have bank accounts under US jurisdiction and travel mostly to friendly regional states, renders the individual sanctions symbolic at best. The sanctions on companies are more consequential if rigorously enforced as this could hit the war chests of warring parties. They include various measures such as freezing assets, prohibiting financial transactions, blocking trade, restricting access to US markets, and limiting interactions with US individuals or entities. 

A sign that the US imposition of sanctions might have aided the mediation is the fact that the belligerents have remained in Jeddah, even when the talks were repeatedly adjourned due lack of progress. By maintaining its engagement, the SAF is likely seeking to assert its claim that it remains the sovereign representative of Sudan. The RSF, for its part, is eager to act as a responsible peace partner. However, the actual conduct of both belligerents underlines their lack of sincerity.  

Sanctions must take into account Sudan’s military business and loophole savvy 

The corporate sanctions have clearly not achieved much change in their first two months, as the behavior of the belligerents has not significantly changed. While it may be too early for a definitive assessment, there are two main weaknesses to the current sanctions that need to be addressed. First, as currently configured, there is too much opportunity for evasion of the sanctions, and second, to be effective, sanctions must be part of an overall diplomatic and global policy strategy. 

A first indication of the former weakness came through defiant dismissals by the sanction’s targets. The SAF touted on its social media platforms that the Military Industrial Corporation (MIC), the predecessor to the DIS, was designed specifically to circumvent comprehensive US financial and trade embargoes on regime of Omar al-Bashir in the 1990s and helped Sudan nonetheless become the third largest weapon manufacturer and exporter in Africa

Another issue is that it is relatively easy to move business assets away from sanctioned businesses to newly incorporated ones. Local media reports documented how the Dagalo family liquidated four companies linked to the Wagner Group in 2022 in anticipation of the reach of US secondary sanctions that, in the end, failed to materialize. Further, when Wagner Group’s Meroe Gold attempts in 2021 to liquidate itself by transferring its shares to a front company incorporated in Sudan were blocked by an anticorruption panel, the company managed to make the change following the coup of October 2021 that toppled the civilian-led reformist government.

Coordinated sanctions could play a more effective role in ending conflict  

These kinds of maneuvers are made easier when only one nation, like the US, is sanctioning. A broader strategy of coordinated sanctions with its allies in the West, the United Kingdom, and the European Union appears to be emerging and would likely be more effective. On July 12, the UK announced sanctions against three companies linked to each of the two parties with the aim of cutting their funding to pressure them into engaging in the peace process, ending atrocities against the Sudanese people and allowing access to humanitarian aid. In addition to the four companies targeted in the US June designations, the UK blacklisted the SAF-linked Zadna International Company for Investment Ltd., and GSK Advance Co. Ltd., a security company linked to the RSF commanders. 

EU action on sanctions has often been hobbled by the need to persuade decisionmakers in all 27 member states of their relevance, while also addressing concerns about the potential political consequences. Realpolitik can also weaken resolve. For example, the RSF imported “Predator” high-end electronic surveillance technology via the EU in 2022 under the pretext of monitoring criminal gangs trafficking migrants to Europe. 

Nonetheless, there are indications at the time of writing this article that the EU is drafting a specific sanctions regime for Sudan modeled on those recently announced by the US that target individuals and entities obstructing Sudan’s path to democracy. This follows the precedent of the EU Council’s listing of 11 individuals and seven companies linked to the Wagner Group in February 2023 for their involvement in serious human rights and corruption activities in the CAR, Mali, Ukraine, and Sudan. Sanctioned Sudanese entities include M-Invest, the Wagner Group’s investment arm in Sudan, and its gold producing and trading subsidiary Meroe Gold. Both had been sanctioned by the US in July 2020 for their suppression of prodemocracy protesters and undermining democratic reforms in Sudan. At the time, both entities reportedly maintained close relations with SAF and RSF gold mining operations. It is not clear whether the US and subsequently the EU sought to impose secondary sanctions on Sudanese entities transacting with the listed Russian entities. 

UAE and Egypt could undermine possibility of peaceful negotiations 

An additional factor is the importance of the relevant business relationships and activities. The powers with the closest business ties to the SAF and the RSF are Egypt and the UAE. Both see the outcome of the ongoing power contest in Sudan as vital to their national security, namely using ruling kleptocratic authorities to siphon Sudan’s agricultural and mineral resources to benefit their own economies. The lucrative rewards of their siding with their eventual winner, are likely to render them immune to US pressure to limit their business transactions with security companies in Sudan. 

In this context, the US should consider closer cooperation with its UK and EU partners to make the sanctions measures more effective. Serious consideration must be given to targeting those supplying weapons to the belligerents, with Turkey reportedly supplying drones to the SAF and fighters and weapons being channeled through Sahelian states to the RSF. Effective enforcement would also require clarification that customers, suppliers, and trade partners of the sanctioned corporations and their subsidiaries risk secondary sanctions if business ties are continued.

Sanctions need to be part of a comprehensive international strategy, which appears to be lacking at this point in the conflict. Such a strategy must deny the belligerents any governing role in the post-conflict political dispensation as both have proven themselves indifferent to the fate of their countrymen and the survival of Sudan as a viable state. Partners in this strategy should also clarify and commit to financial investments in the reconstruction of Sudan once the war stops, conditional on the SAF, the RSF, and other security agencies subjecting all their corporate holdings to relevant oversight of civilian authorities. Short of this, security companies will continue undermining the ability of any future civilian government to bring sustainable peace and a viable national economy to Sudan.

Dr. Suliman Baldo is an expert in justice, human rights and conflict resolution in Africa and served as the Africa head of International Crisis group, the International Center for Transitional Justice, and has also held human rights and mediation posts in the United Nations. He has provided expert advice on human rights in Mali and Darfur and currently leads the Sudan Transparency and Policy Tracker.

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