Sudan: Terrorism and Money Laundering By: Ibrahim Musa & Mohamed Osman Adam

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1 Sudan: Terrorism and Money Laundering By: Ibrahim Musa & Mohamed Osman Adam Sudan has recently approved a new legislation banning money laundering and terrorism. It is the first comprehensive legislation for fighting money laundering and financing terrorism. The Parliament passed in late last June an interim decree law on fighting money laundering and financing terrorism for The law was meant as a substitute to the law combating money laundering for 2003 so as to cope with the international legislative developments of fighting the money laundering phenomenon. This was imperative after practical experience and the remarks made by the experts of the World Bank and International Monetary Fund (IMF) and the Sudanese experts indicated the existence of shortcomings in

2 the 2003 law; a matter that necessitated the issuance of a new law for The new law consists of 37 articles over seven chapters containing the title and the control and supervision authorities on the financial institutions and commitments thereof. It provides for the establishment of a unit for financial investigation, its seat and formation, demanding information and notifying the control and supervision authorities. It also provides for temporary suspension of suspected transactions, freezing money, publishing reports and exchanging information with similar units in other countries. Article 21 of the law outlined the jurisdictions and powers of the administrative committee for combating money laundering and financing terrorism, issuing rules that guide the administrative investigation, examination and prosecution in coordination with the relevant authorities. The outstanding motives of promulgation of this law include implementation by the Sudan of its international commitments and response to recommendations of the money laundering working committee that was set up by the summit of the industrialized group of seven in 1989 on fighting money laundering which oblige all countries to take measures and enact legislation they deem necessary for incriminating money laundering in compliance with the Vienna Convention.

3 Article 33 of the law defines the crimes of money laundering and terrorism financing, regarding a perpetrator of money laundering terrorism financing crime is a person who conducts a behavior of acquiring, possessing, disposing of, utilizing, transferring, administering, keeping, exchanging, investing or depositing proceeds by manipulating their value or movement or concealing or disguising their origin or their real nature or the manner in which they are handled or possessed or the relevant rights, whether the crime that resulted from these proceeds occurs in the Sudan or abroad and is punishable under the Sudanese law or that of the country where it is committed. The new law classifies a perpetrator of the crime of financing terrorism as the person who collects or offers funds directly or indirectly for committing a terrorist act or to be used a terrorist organization or individual. The law defines a terrorist act as one prohibited by the anti-terrorism law of 2001 or any other substitute law, or any act of a terrorist nature prohibited by an international treaty to which the Sudan is party.

4 The law regards a perpetrator of a crime of money laundering financing terrorism as a person who is about to commit, participates, instigates or helps in perpetrating this crime. He is liable to the same punishment set for the original perpetrator. The law provided in Article 3 for formation of a financial investigation unit that is tasked with analyzing information on funds suspected of having been obtained from a crime or for financing terrorism. The committee transmits the information to the concerned prosecution office to take action whenever it reaches evidence of a crime under the Criminal Code of 1991 or any other substitute law. The new law makes reference to so-called non-financial institutions which may be used for money laundering such as the real-estate agencies, gold merchants, goldsmiths and lawyers who register the companies, provided that the lawyers retain the right for confidentiality of the information. The law names the supervision and control authorities as the Central Bank, the Khartoum Stock Market and the General Board for the Insurance Control. The law stipulates that a person who commits a crime of money laundering and financing terrorism is sentenced to up to 10 years in prison and a fine that will be equal to double the amount that is mentioned in the case. The law state that the confiscated money be deposited aside from the public funds and spent for the treatment of patients suffering from diseases which are difficult to cure. A number of jurists and economists were in consensus on the timeliness of the law, noting that it conforms to the international economic development and would contribute to combating the phenomenon of money laundering and financing terrorism which they says has spread of late and

5 has led to the collapse of numerous international financial institutions. Dr. Babikir Mohamed al-tom, the Alternate Chairman of the National Assembly's Economic Committee, has described the new law as one of the most important legislations, indicating that it has provided for the formation of a supervisory committee and has empowered it to issue guiding rules for investigation and prosecution in addition to exchanging information, internally and externally, on the practice. This committee, Tom noted, is also empowered to monitor financial and non-financial activities. He also commended the provision of putting aside the confiscated money for the medical treatment of difficult cases and for fighting money laundering and other economic crimes. The law was issued on the right time, says Advocate Abboud Jabir Saeed who suggests the organization of a media campaign to enlighten the public on the danger of money laundering. He stresses that the legislative and executive bodies must continuously keep abreast of the developments in the methods of money laundering and terrorist crime for which he says Sudan has enacted legislation to counter its hazards to the safety and security of the society. Banking Violations Prosecution Under-Secretary Amir Mohamed Ibrahim says the timing of the law was wellchosen as this headed next November towards an assessment by an international team of the country's commitment to recommendations on money laundering. "By issuing this law, the Sudan has shown that it is committed to those recommendations and has made positive steps for fighting money laundering and financing terrorism," Ibrahim says.

6 It is one of the most advanced laws made by the international financial community for combating the money laundering practice as it has observed all of the 40 recommendations on money laundering and nine recommendations on financing terrorism, says the prosecution under-secretary. He added that the new law has included in chapter one term which were not mentioned in the anti-terrorism act of 2001 and anti-money laundering act of 2003 such as the transit agent and the real beneficiary of the money or the person who actually controls this money. The law has responded to the most prominent international requirement of establishing a financial investigation unit, or financial intelligence unit, tasked with verifying financial information to determine whether it conforms to the financial recommendations on money laundering and financing terrorism and submits this information to the concerned authorities for legal action, Ibrahim says. He described the creation of this unit as an advanced step made by the Sudan. The prosecution under-secretary also made reference to the provision in the new law on non-financial institutions which could play as channels for money laundering like real estate business, gold merchants and goldsmiths not included in the previous law. The law stipulates that the banks should feed the unit with the required information, says the jurist, making reference to the foreign currency declaration that should be made by an arriving person with the customs authorities. He says removing criminal, administrative and civil responsibility from a person who makes notification or gives

7 information offers a lawful immunity to that person. The prosecutor under-secretary points out the powers granted by the law, in Article 16, to the prosecutor general for withholding suspected any money. He also point to a provision by the new law on formation of an administrative committee to be chaired by the Justice Under-Secretary and to include the Central Bank of Sudan Deputy Governor, the Finance, External Trade and Investment Under-Secretaries and representatives of the customs, investigation, Interpol, banking control department and the national information center. The Head of the Banking System Prosecution says that, following the issuance of the new law, they filed two lawsuits under Article 33 of the money laundering law and that investigation is still going on in cooperation between the prosecution and the financial investigation unit. He explains that the financial investigation unit is in charge of coordination between the Sudan and the other countries in connection with the investigation, indicating the existence of cooperation between the Sudan and the concerned international institutions.

8 The banking system prosecution official believes that the new law is effective enough for fighting money laundering and financing terrorism because it meets all requirements set by the money laundering recommendations. He predicts that it will back the Sudan position during next November assessment of whether the country is coping with combating money laundering and financing terrorism. He says that the new law would not have an adverse impact on economic investment in the Sudan because the law deals with "dirty" money which the Sudan does not deal with, whether in the field of investment or otherwise. The prosecution official says the charitable tasks would not be affected as the anti-terrorism recommendations target organizations while the charity activities in the Sudan center on such transparent and public projects as mosques and water wells. Ends-Ibrahim Musa- Mohamed Osman Adam