Egyptian banks are refusing to receive wire transfers from Sudanese and Libyan companies in line with instructions issued by the Central Bank of Egypt (CBoE).

The CBoE decided to ban banking transactions with several Arab and African countries, including Qatar, Libya, Syria and Sudan, saying those countries are not committed to implementing anti-money laundering laws.

It also said there are suspicions that there are money transfers from those countries to civil and rights organisations inside Egypt and are being misused.

According to Egypt’s Al Youm Al Sabi’ daily newspaper, the Egyptian Chemical and Fertiliser Exports Council (CFEC) ,which is headed by Waleed Hilal, received complaints from several companies in the sector, saying they were negatively affected by the decision to ban banking transactions with those countries.

In a press statement on Wednesday, Hilal said that the companies are facing problems in receiving their dues from clients in some Arab countries due to CBoE instructions.

He disclosed that the Arab Bank (AB) refused to receive a wire transfer from a Sudanese company to an Egyptian company operating in his sector, saying the same company made the transfer from its account in Abu Dhabi in the UAE to the National Societe Generale Bank (NSGB), but the latter also refused to receive it.

Last January, the governor of the Central Bank of Sudan (CBoS), Mohamed Ali Al-Sheikh, acknowledged a lack of transparency in reporting money laundering cases in the country.

He described Sudan’s rating of compliance with the standards of the Financial Action Task Force (FATF) as unsatisfactory and added they are concerned about Sudan’s current standing, saying that it would expose the country to greater risks.

The FATF is an intergovernmental organisation founded in 1989 to develop policies to combat money laundering and terrorism financing.

He acknowledged that combat operations within all institution in the country are “weak and slow”, calling upon compliance officials to put more efforts into identifying risks within financial institutions besides implementing the FATF 40 recommendations on money laundering and terrorism financing.

In February, the Sudanese government acknowledged reports that a number of Saudi and European banks took a decision to stop dealing with Sudanese banks and attributed it to pressure by the United States.

But the CBoS issued a statement, saying that the move was driven by routine banking procedures undertaken by the financial institutions.

There was no comment from Saudi Arabian Monetary Agency (SAMA) and it is not clear if the latter issued the directive or if it was decision by individual banks.

A Western diplomat told Agence France Presse (AFP) over the weekend 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.
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Source: Sudan Tribune, April 9, 2012 – titled “Egypt’s central bank bans dealings with Sudanese banks: report”.