U.S. Has Financial Tools to Counter Atrocities in Africa’s Deadliest War Zones, says new report

[Elisabeth Janaina]

U.S. Has Financial Tools to Counter Atrocities in Africa’s Deadliest
War Zones, says new report

By Enough Project,
Washington, DC
President Salva Kiir Mayardit of south Sudan

President Salva Kiir Mayardit of south Sudan

October 15, 2016 (Nyamilepedia) – A new report, “Bankrupting
Kleptocracy: Financial Tools to Counter Atrocities in Africa’s
Deadliest War Zones,” by the Enough Project, highlights three types of
potent financial pressure tools that the U.S. can use to build
leverage in the fight against violent kleptocracy: targeted sanctions,
anti-money laundering provisions, and anti-bribery laws, including the
Foreign Corrupt Practices Act. The U.S. government has used these
tools to counter terrorism, nuclear proliferation, and organized
crime. These tools, the authors argue, can also be used to fight
violent kleptocracy in East and Central Africa.

The report, authored by J.R. Mailey and Jacinth Planer, was launched
at an event on October 11th at the Carnegie Endowment for
International Peace in Washington, DC.

J.R. Mailey, report author and Senior Policy Analyst for Illicit
Finance & Conflict at the Enough Project, said: “In several
conflict-affected countries in East and Central Africa, the state has
been hijacked and transformed from an institution that is supposed to
provide social services and safeguard the rule of law into a predatory
criminal enterprise that does quite the opposite. Kleptocratic
networks use state power to loot public coffers and natural resource
wealth with impunity, and sideline or silence those who get in their
way.”

John Prendergast, Founding Director at the Enough Project, said: “For
decades, the United States and other international donors have poured
billions of dollars into peace talks and endless peacekeeping
missions. Although these efforts can be valuable parts of an effective
peacebuilding strategy, they often fail to achieve the desired result
because they don’t address a core root cause and driver of war: the
warped incentive structures of officials who hijack state
institutions, loot public funds and natural resources, and use extreme
violence to maintain their grip on power.”

The report notes that the globalized economy allows kleptocrats and
their enablers to store, move, and launder ill-gotten gains. The U.S.
government can, with its partners, leverage the interconnectivity of
the global economy, the size and primacy of the U.S. financial system,
and the significance of the U.S. dollar in global trade and money
exchange to target kleptocrats and their ill-gotten gains.

Prendergast added: “Tools of financial pressure—especially
highly-targeted and robustly enforced sanctions and anti-money
laundering measures—that have successfully been used for other
national security objectives should increasingly be deployed to create
leverage in preventing atrocities and resolving these conflicts.”

“Violent kleptocracy,” a system in which ruling networks and
commercial partners capture the state and hijack governing
institutions to extract resources and maintain the security of the
regime, has had disastrous results in East and Central Africa. The
looting and diversion of resources has stifled commerce and economic
development, facilitated a wide range of criminal activities, and
stoked violence and the commission of mass atrocities.

The report argues that the fight against corruption must become much
more of a pillar and a central focus of U.S. engagement with these
countries as leaders and members of society work together to shift the
incentive structures underpinning political, economic, and military
decision-making by ruthless elites.

Brad Brooks-Rubin, Director of Policy at the Enough Project, said:
“When developing strategies for engagement in conflicts in East and
Central Africa—a region home to several of the longest-standing and
deadliest conflicts in human history—the U.S. government must
acknowledge that the wholesale theft of state assets is a central
feature of each crisis. Supporting efforts to promote transparency,
accountability, and good governance need to become a cornerstone of
U.S. engagement with East and Central African countries that have been
plagued by violent kleptocracy.”

Mailey added: “The politicians, military officials and warlords most
responsible for mass atrocities and widespread looting often do so
without suffering any consequences for their misconduct. The tools of
financial pressure can help change that and, ultimately, chip away at
the environment of impunity.”

Tools highlighted in the report:

Targeted Sanctions:

Targeted financial sanctions are a potent tool to counter
kleptocracy precisely because of their ability to impact the target
the wealth of senior officials within kleptocratic regimes.
Sanctions can be used to alter incentives to violently extract
wealth and repress dissent by:
Targeting the wealth of senior officials
Targeting individuals who engage in public corruption,
undermine democracy, or stifle free speech and assembly
Targeting those who facilitate and enable kleptocracy
(lawyers, wealth managers)
Targeting secondary actors who do business with those who are
under sanctions
Targeting certain business sectors but not others
Limiting the negative impact on humanitarian and social
services by clarifying and expanding sanctions exemptions.

Anti-Money Laundering and Asset Forfeiture:

Numerous anti-money laundering (AML) statutes provide the U.S.
government with the power to trace, block and, in some cases, seize
the illicit proceeds of overseas corruption. Anyone who knowingly
facilitates the movement of the illicit funds into or through the
United States (including the U.S. financial system) engages in money
laundering and could be subject to criminal prosecution as a result.
The Treasury Department’s Financial Crimes Enforcement Network
(FinCEN) has significant authority to place enhanced due diligence
requirements on financial institutions, investigate financial crimes,
and even impose sanctions-like prohibitions on overseas entities
believed to be involved in money laundering. Moving forward, FinCEN
should use these powers to identify banks, institutions, and classes
of transactions that kleptocrats use to loot and launder state assets.

Foreign Corrupt Practices Laws:

A foundational element of the U.S. framework for countering
violent kleptocracy is the Foreign Corrupt Practices Act (FCPA). This
law imposes a compliance requirement that places certain
record-keeping and accounting requirements on U.S. firms doing
business overseas and criminalizes bribery of foreign officials in
order to gain a competitive advantage.
Tools like the FCPA should be more vigorously deployed in
countries marked by violent kleptocracy where its impact will be more
effective and meaningful in terms of saving lives.

LINK TO THE FULL REPORT: http://eno.ug/2d3v67P

FOR MEDIA: For media planning to attend the event in person, please
email: pr...@enoughproject.org. For media inquiries and interview
requests, please contact: Greg Hittelman, Director of Communications,
+1 310 717 0606, g...@enoughproject.org.

About THE ENOUGH PROJECT
The Enough Project, an atrocity prevention policy group, seeks to
build leverage for peace and justice in Africa by helping to create
real consequences for the perpetrators and facilitators of genocide
and other mass atrocities. Enough aims to counter rights-abusing armed
groups and violent kleptocratic regimes that are fueled by grand
corruption, transnational crime and terror, and the pillaging and
trafficking of minerals, ivory, diamonds, and other natural resources.
Enough conducts field research in conflict zones, develops and
advocates for policy recommendations, supports social movements in
affected countries, and mobilizes public campaigns. Learn more – and
join us – at www.EnoughProject.org.