Sudan may cut stake in UAE bank to avoid US sanctions
January 13, 2008 (KHARTOUM) — The governor of Sudan Central Bank Sabir Mohammed Hassan said that his government may be forced to shed its ownership of a newly merged bank to avoid US sanctions.
Hassan told reporters that the US administration imposes sanctions on any institution in which his government “holds 10% or more of its shares”.
Dubai Islamic Bank unit Bank of Khartoum plans to buy smaller Sudanese rival Emirates and Sudan Bank according to press reports.
Dubai Islamic, the third-biggest Gulf Islamic lender by market value, would own 28 percent of the new bank while Sudan’s government will own 10 percent.
US sanctions dating back to the Clinton administration bars any financial dealings with Sudan or institutions owned by Khartoum as such.
According to the US regulations on Sudan sanctions “all property and interests in property of the Government of Sudan that are in the United States, that come within the United States, or that are or come within the possession or control of U.S. persons, including their overseas branches” are to be blocked.
Hassan acknowledged that the US sanctions are “hurting Sudan’s economy”.
This year Sudan Central Bank switched its foreign currency reserves from dollar to Euro to hedge the impact of US economic sanctions.
Last May Bush ordered stiffened sanctions on Sudan that will bar 31 companies controlled by the government from doing business in the U.S. financial system as well as sanctions on four Sudanese individuals, including two senior Sudanese officials and a rebel leader suspected of involvement in the Darfur violence.
Abdel-Moniem Hassan Sayed, president of Al-Shamal Islamic bank in Sudan speaking to Al-Qabas daily from Kuwait last month said that the banking sector in the African nation is experiencing hardships as a result of US sanctions.
“Sudanese banks are suffering from endless US regulations on dollar transactions. We as a are going through extreme difficulties. Every day the umbrella of US sanctions and pertaining regulations keeps expanding” Sayed said.
British diplomats speaking to the Daily Telegraph said that they believe US sanctions have added pressure on Khartoum forcing it, among other things, to change position on the deployment of peacekeepers to Darfur.
Last month US president Bush signed a divestment bill aimed at providing protection from lawsuit to State and local divestment efforts in Sudan.
The bill is likely to impact companies with dealings in Sudan particularly oil companies from China, Malaysia and India.
More than 200 000 people have been killed and some 2.5 million displaced in the four-year conflict in Darfur, an area the size of France.
(ST)