Saudi Arabia distances itself from banks’ decision to suspend dealings with Sudan
May 10, 2014 (KHARTOUM) – The government of Saudi Arabia informed Sudan that it was not behind a decision taken by an unknown number of Saudi banks last February to suspend any dealings with Sudan.
“Some Saudi banks halted dealings with Sudan and some of the [Sudanese] institutions’ accounts in Saudi banks were closed. When we contacted officials in the kingdom we were told that this decision is not political,” the Sudanese ambassador in Riyadh, Abdul-Hafiz Ibrahim, told the London-based al-Hayat newspaper on Saturday.
“The Saudi finance minister conveyed that to his Sudanese counterpart and confirmed that there was no guidance issued [by Riyadh] on this matter,” he added.
The Sudanese ambassador warned that this move by Saudi banks will adversely impact investors in both countries.
Ibrahim claimed that this issue arose because of a directive by the United States Treasury Department’s Office of Foreign Assets Control (OFAC) asking Saudi banks to suspend US dollar dealings with Sudan.
“We have [therefore] asked Saudi banks to return to the system of converting the currency from the US dollar to the Saudi Riyal as an alternative solution because stopping transactions would hurt a lot of dealers especially those who work in the fodder and livestock sector, particularly in this period when we are approaching the [fasting] season of Ramadan and the majority of livestock comes from Sudan to the kingdom,” he said.
The deputy head of Sudan’s National Agency for Financing and Export insurance, Al-Hadi Ahmed Abdalla, told state media earlier this month that the restrictions imposed by the Saudi banks on wire transfers or demanding pre-payment or through a letter of guarantee for the value of the exports.
Abdalla said nonetheless that they expect to resolve this situation very soon.
Sudanese officials said previously that their country contributes 50% of the needs of Saudi Arabian market which is estimated at 4 million heads annually.
When asked whether Saudi airlines will stop flights to Sudan as was rumored, Ibrahim responded: “We do not believe so, because this measure [if taken] is very serious, and will not be adopted by the Kingdom. We have a lot of workers moving between the two countries over these lines and Saudi Arabian airlines take into account the strategic interests of the company”.
He also disclosed that Sudan is leaning towards exempting Saudi nationals from entry visas.
“We detected a steady increase in the number of visas [issued to Saudi citizens] to travel to Sudan and we are now moving towards the abolition of visa [requirement],” the ambassador said.
The business community in Sudan has grown concerned that Saudi Arabia is starting a de-facto economic embargo of the country following a revelation last February that a number of Saudi and European banks took a decision to stop dealing with Sudanese banks.
Sudanese officials attributed the move to pressure by the United States which has economic sanctions imposed on the East African nation since 1997.
A Western diplomat told Agence France Presse (AFP) at the time that the move by the European banks appears to reflect an increasingly cautious attitude by financial institutions which do not want to risk being found in violation of US sanctions.
For Saudi Arabia, strained political relations over Sudan’s links to Iran could be a factor in the banks’ decision, the Western diplomat said.
Saudi Arabia is believed to be housing more than half a million Sudanese expatriates who represent a vital source of hard currency remittances to their country.
(ST)