Global Magnitsky
October 11, 2019

U.S. Sanctions Two Businessmen for Corruption in South Sudan

By Samuel Rubenfeld

 

The U.S. Treasury Department on Friday imposed sanctions on two businessmen for their involvement in corruption in South Sudan.

Ashraf Seed Ahmed Al-Cardinal and Kur Ajing Ater have used bribery, kickbacks, procurement fraud and other corrupt acts with senior South Sudanese officials to steal state assets for themselves, according to the Treasury. They, and the companies they own or control, were designated under the Global Magnitsky Act, which authorizes sanctions on individuals and entities involved in significant corruption or human rights abuses. The Treasury said it has sanctioned 122 individuals and entities under the executive order implementing the Global Magnitsky Act.  

Al-Cardinal and Ajing leverage their businesses and political connections to engage in corruption at great expense to the South Sudanese people,” said Treasury Under Secretary Sigal Mandelker. “Privileged elites should not be allowed to profit from conflict as they undermine efforts to bring lasting peace to South Sudan.” 

The designations come days after Thomas Hushek, the U.S. ambassador to South Sudan, warned that the U.S. would impose more sanctions if the government doesn’t implement a September 2018 deal to end a civil conflict. The war has flared off and on since 2013. The Treasury in 2014 implemented a sanctions program targeting those causing conflict in the country and has designated people on both sides of the war, including a retired Israeli general. 

The Treasury warned banks in 2017 about South Sudanese political figures and rebels potentially trying to use the U.S. financial system to move or hide the proceeds of corruption.

Al-Cardinal, a Sudanese businessman, was dubbed “South Sudan’s original oligarch” by The Sentry in a report earlier this week that had called for his designation. He has lined his own pockets since 2006 by exploiting opaque procurement processes, weak oversight and relationships with South Sudan’s most powerful politicians, according to the report. 

Al-Cardinal built a global network of companies and business partners, bought luxury real estate in London and Dubai, and has traveled to Washington, D.C. as recently as November 2018, the Sentry reported. Barring international pressure, Al-Cardinal “will remain a major enabler of corruption and violence for President Salva Kiir’s government,” The Sentry said. 

Some South Sudanese officials have expressed dissatisfaction with government corruption, saying that though large amounts of money were paid to Al-Cardinal for supplies and provisions, government forces never seemed to be adequately resourced, the Treasury said. A company partially owned by Al-Cardinal has also been publicly implicated in the import of amphibious armored vehicles that gave the government the ability to extend offenses that included attacks on innocent civilians, according to the Treasury.

Al-Cardinal has also engaged in sanctions evasion, the Treasury said. Following the December 2017 designation of Benjamin Bol Mel, the senior South Sudanese official began to use a bank account in the name of one of Al-Cardinal’s companies to store his personal funds -- in a bid to avoid the effects of a potential sanctions designation, the Treasury said. Bol Mel, president of a construction company that received massive contracts from the government, was identified by Treasury when sanctioned as Kiir’s one-time principal financial adviser and private secretary. 

Ajing has bribed key officials in the South Sudanese government to maintain influence and access to the country’s oil market, according to the Treasury. He used the bribes to both curry favor with a senior government gatekeeper and ensure the silence and compliance of key officials, the Treasury said. Ajing “has been obligated large amounts of oil” by the government, and has given money and vehicles in return to senior officials. Ajing claimed to have paid them millions of dollars, doing so in cash rather than through bank transfers at an official’s request, according to the Treasury.

Ajing received a large cash payment from the South Sudanese government in late 2018 for food, but the money went directly to a senior official, according to the Treasury. And he received millions in contracts for the military, including one deal that exceeded the total amount budgeted for military goods and services by a factor of ten, the Treasury said.

“The corrupt activities of these individuals robbed critical resources from a war-torn country. The population of South Sudan faces food insecurity, and an estimated one-third of South Sudanese have been forced to flee their homes,” said Secretary of State Mike Pompeo. 

“We urge the government of South Sudan to take seriously the clear linkage between corrupt activities and the motive of some elites to disrupt the peace agreement, the implementation of which has reached a critical stage,” Pompeo said.

 

Kharon research

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