US Sanctions Pose Serious Threat to Sudan’s Strategic Reserves of Wheat
July 14, 2014 (KHARTOUM) – Sudan’s strategic reserve of wheat has declined sharply due to refusal of several banks in western countries and Gulf States to open documentary credits for importing the commodity.
Last month, France’s largest bank, BNP Paribas, agreed to pay nearly $9 billion to resolve criminal allegations that it processed transactions for clients in Sudan and other blacklisted countries in violation of the United States trade sanctions.
After months of negotiations, BNP admitted to violating US trade sanctions by processing billions of dollars in illegal transactions on behalf of clients in Sudan, Cuba and Iran.
Washington imposed economic and trade sanctions on Sudan in 1997 in response to its alleged connection to terror networks and human rights abuses. In 2007 it strengthened the embargo, citing abuses in Darfur which it labeled as genocide.
Informed sources told Sudan Tribune that officials of a major Sudanese flour mills continued to contact the Central Bank of Sudan (CBoS) for a whole week in order to get the foreign exchange needed for wheat imports amid fears that its operations could stop.
Sudanese flour market is controlled by three major companies including Sayga flour mills which is owned by Osama Daoud, Weta flour mills which is owned by Ibrahim Malik, and the government-owned Seen flour mills.
Sudan imports more than 2 million tones of wheat annually at a cost of $1.5 billion dollars. The government plans for achieving self-sufficiency has failed since 1993 while domestic consumption have increased significantly.
The same sources said that commercial banks have been keeping large numbers of documentary credits for several months because they couldn’t find a correspondent bank to accept them amid government reticence and search for solutions.
The sources also pointed that several Sudanese importers are reluctant to use their accounts in foreign banks to provide foreign trade for exporters particularly as the US became increasingly active in pursuing banks which offers such service.
International financial institutions became increasingly cautious in dealing with Sudan as they do not want to risk being found in violation of US sanctions.
Following BNP Paribas penalties, the US federal and state authorities intensified investigations of other foreign banks over signs of similar infractions. At least six banks in Germany, France, Italy or Japan are among the institutions that could face fines or forfeitures for processing transactions linked to Sudan, Cuba, and Iran.
The sources also said that wheat crisis has surfaced since five days ago, pointing that Qatari banks which used to cooperate with Sudan started to face difficulties in opening documentary credits for its Sudanese counterparts since last month.
Last March, a number of Saudi and European banks took a decision to stop dealing with Sudanese banks and attributed it to pressure made by the United States.
(ST)
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| A Sudan bread distribution center. |
Last month, France’s largest bank, BNP Paribas, agreed to pay nearly $9 billion to resolve criminal allegations that it processed transactions for clients in Sudan and other blacklisted countries in violation of the United States trade sanctions.
After months of negotiations, BNP admitted to violating US trade sanctions by processing billions of dollars in illegal transactions on behalf of clients in Sudan, Cuba and Iran.
Washington imposed economic and trade sanctions on Sudan in 1997 in response to its alleged connection to terror networks and human rights abuses. In 2007 it strengthened the embargo, citing abuses in Darfur which it labeled as genocide.
Informed sources told Sudan Tribune that officials of a major Sudanese flour mills continued to contact the Central Bank of Sudan (CBoS) for a whole week in order to get the foreign exchange needed for wheat imports amid fears that its operations could stop.
Sudanese flour market is controlled by three major companies including Sayga flour mills which is owned by Osama Daoud, Weta flour mills which is owned by Ibrahim Malik, and the government-owned Seen flour mills.
Sudan imports more than 2 million tones of wheat annually at a cost of $1.5 billion dollars. The government plans for achieving self-sufficiency has failed since 1993 while domestic consumption have increased significantly.
The same sources said that commercial banks have been keeping large numbers of documentary credits for several months because they couldn’t find a correspondent bank to accept them amid government reticence and search for solutions.
The sources also pointed that several Sudanese importers are reluctant to use their accounts in foreign banks to provide foreign trade for exporters particularly as the US became increasingly active in pursuing banks which offers such service.
International financial institutions became increasingly cautious in dealing with Sudan as they do not want to risk being found in violation of US sanctions.
Following BNP Paribas penalties, the US federal and state authorities intensified investigations of other foreign banks over signs of similar infractions. At least six banks in Germany, France, Italy or Japan are among the institutions that could face fines or forfeitures for processing transactions linked to Sudan, Cuba, and Iran.
The sources also said that wheat crisis has surfaced since five days ago, pointing that Qatari banks which used to cooperate with Sudan started to face difficulties in opening documentary credits for its Sudanese counterparts since last month.
Last March, a number of Saudi and European banks took a decision to stop dealing with Sudanese banks and attributed it to pressure made by the United States.
(ST)
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