Breaking Out of the Spiral in South Sudan Anti-Money Laundering, Network Sanctions, and a New Peacemaking Architecture

"The metastasizing crisis in South Sudan requires a new strategy for achieving a sustainable peace. Conditions on the ground are unbearable for large swathes of South Sudan’s population, and regional peacemaking efforts are not delivering results. Absent any new variables, the parties to South Sudan’s war, particularly the government, lack sufficient incentives to make the necessary compromises for peace. Since an outright victory by any party does not seem realistic in the short run, the variable that actually could alter the parties’ incentive structure is much more effective, focused, and meaningful international pressure. The U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) recently announced new sanctions designations for three South Sudanese individuals and three related companies associated with destabilizing South Sudan. This is a critical step forward, as is the new advisory from the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) alerting financial institutions to the risk of potential movement of assets of South Sudanese Politically Exposed Persons (PEPs). These welcome and promising developments are a positive step toward countering conflict financing in South Sudan. But much more should be done. International partners should support these U.S. policy measures and take additional steps to build up the leverage required to change calculations made by South Sudanese political and military leaders who are responsible for violence and profit from grand corruption. Until just recently, the international community had imposed only half-hearted sanctions on a few individual mid-level and upper-level military commanders, with little effort expended to enforce the sanctions or to go after the broader networks that are funding the war and profit from corruption. Such individual sanctions by themselves are inadequate in shifting the calculations of abusive leaders and countering the violent kleptocratic system as a whole. The levying and enforcement of network sanctions of the sort that the U.S. government has just announced, especially if backed up by strong enforcement and more aggressive international anti-money laundering measures, could undermine the abilities of leaders and enablers to move illicit funds through the international banking system. Peace efforts for South Sudan are unlikely to succeed, and there should be no expectation that the war will be resolved, until those who profit from state capture face serious financial and political costs."