Strengthening Financial Integrity in Sudan

Challenge

In 2010, Sudan was identified by the FATF as a country that had strategic AML/CFT deficiencies, then placed under enhanced monitoring to address key issues of its AML/CFT framework. Its financial system was already largely disconnected from the international financial system due to economic and other sanctions by some foreign governments. These constraints had adverse implications for trade and financial transactions, thus encouraging informal transfers and transactions in cash or barter.

Approach

With direct involvement from the National AML/CFT Committee, the Central Bank of Sudan, the Ministry of Justice, and other stakeholders worked together with the IMF Legal Department technical assistance project beginning in 2013 to enhance the AML/CFT framework. A variety of working groups were created to pursue the development of the legal, regulatory, supervisory and institutional regimes. The reform was conducted according to a top-to-bottom approach, starting with the review of the legal framework and structures, then addressing more operational issues. The IMF and Sudanese authorities forged a productive and enduring partnership: staff provided continuous support from HQ and during missions, while authorities demonstrated high-level support and dedicated considerable resources.

Impact

In 2015, Sudan’s significant progress in addressing the strategic AML/CFT deficiencies was recognized, and the FATF determined that therefore Sudan was no longer subject to “grey listing”. A year later, Sudan was shifted from the enhanced to regular follow-up process of its AML/CFT regime. The financial intelligence unit (FIU) of Sudan is expected to join the Egmont Group of FIUs in June 2017. In early 2017, the US trade and financial sanctions were lifted. Sudanese banks are now expected to gradually regain access to global correspondent banking services. There was also the first conviction of money laundering ever in Sudan in 2017. Encouraged by this course of events, authorities launched the national risk assessment and continue to strengthen the AML/CFT framework with IMF assistance.