US bank to face genocide financing suit

BNP Paribas has been ordered by a US judge to face a lawsuit accusing the French bank of helping Sudan's Government commit genocide between 1997 and 2011 by providing banking services that violated American sanctions. Legalbrief reports that the ruling once again highlights the role that global firms and insitutions have played in fomenting conflict around the African continent. New York District Judge Alvin Hellerstein found ‘too many facts’ showing a relationship between BNP Paribas' financing and human rights abuses perpetrated by the government, The East African reports. He called it premature to decide whether it was reasonable to hold the bank responsible for causing some of those abuses, which – according to the plaintiffs – included murder, mass rape and torture. The proposed class action was brought by US residents who had fled non-Arab indigenous black African communities in South Sudan, Darfur and the Nuba mountains in central Sudan.

The East African notes that the bank in 2014 agreed to plead guilty and pay an $8.97bn penalty to settle US charges it transferred billions of dollars for Sudanese, Iranian and Cuban entities subject to economic sanctions. While many banks have been accused of aiding in human rights abuses by providing banking services, BNP Paribas' guilty plea was the first by a global bank to large-scale violations of US economic sanctions. Hellerstein said the bank's admission that its employees recognised its role in giving Sudanese entities access to the US banking system meant it could not now argue differently. Thursday's decision came in a lawsuit originally filed in 2016. A different judge dismissed the case in 2018, but a Federal Appeals Court revived it in 2019. 

At the same time, growing international concern about SA's role in the financing of terrorists and terrorist acts in the region contributed to the country being greylisted by the Financial Action Task Force (FATF) in February 2023. A Business Day report says one of the findings of a 2021 report by the FATF was that local authorities had a poor understanding of terrorist financing and that the risk of terrorist financing through SA was not being adequately addressed. It was in response to this, as well as growing concern that SA was not only used as a conduit but also a source of funding for terrorist groups that the Financial Intelligence Centre (FIC), in partnership with the SA Revenue Services and the Department of Social Development, compiled a report that assesses the exposure of non-profit organisations (NPOs) to terrorist financing risk. The report – published last week – forms part of SA’s follow-up action plan to address greylisting by the FATF. ‘Understanding and regularly assessing the particular terrorist financing risks to which SA NPOs are exposed remains the best measure to effectively combat their abuse and exploitation,’ said the acting director of the FIC, Pieter Smit. The assessment would enhance authorities’ understanding of the risks of terrorist financing faced by NPOs. ‘The findings will help us formulate measures to prevent or mitigate the abuse of NPOs for terrorist financing purposes,’ he said. The assessment, which included a survey of 301 NPOs, identified five possible terrorist financing threats: Islamic State and its affiliates in Africa; al-Shabaab and its affiliates in Africa (including al-Sunnah Wa Jama’ah); Nigerian terrorist groups (including Boko Haram); domestic right-wing extremists; and al-Qaeda. The report recommends that SA implement a more targeted approach to dealing with higher-risk NPOs.