Banking Ban on Companies.. An attempt to recover Export Proceeds

Sudan Events Report – Rehab Abdullah

Reactions of economic experts, bankers and company owners varied regarding the Central Bank’s decision to impose a comprehensive banking ban on 157 companies and business names for the second time this year, in addition to temporarily lifting the ban on some of them to regularize their situations and give them a two-month grace period to return export proceeds.
Defamation of Export Companies :

While some considered these decisions as defamation of companies with a long history and record of excellent service, and considered it to cause irreparable moral and material losses to these companies and the country, Mohamed Al-Wathiq Abu Zaid explained his knowledge that a number of these companies were greatly harmed by the impact of the war, as it affected all businesses, and he saw that it would be better for the Central Bank CB to communicate and discuss the conditions of the companies before issuing such decisions so that the country does not lose a great deal of credit and experience in the field of exports, pointing out that one of the factories whose name was mentioned in the ban list, for example, is estimated to be worth five million euros and was completely destroyed in the Bahri Industrial Zone, and insurance does not cover the losses, of course, and there is another factory whose warehouses were looted for millions of dollars and its owners own other companies that fulfill their obligations in full.
He likened this decision and the decision to close commercial records by the Ministry of Commerce before, to the decisions of the Empowerment Removal Committee in their economic harm to the country, and added, “There must be a body to evaluate such cases, while emphasizing the need to punish violators intentionally and without objective reasons.”
Amounts owed to the State Treasury :

But banking expert Dr. Omar Mahjoub criticized the talk about defaming companies by banning them, pointing out that these companies are not committed to paying amounts due to them according to the systems and regulations, adding that these amounts are ultimately in the interest of the country and the citizen, as they may be allocated to purchase medicine, wheat or other, in addition to the fact that these companies were previously warned but did not pay attention to the matter and did not respond, and he acknowledged that there is no doubt that the Central Bank of Sudan CBS is negligent in following the correct procedures, otherwise the number of these companies would not have reached 157 companies, and stressed the need to deter anyone who tamperes with the people’s food and the state’s resources, and added “It must be hung in a public place, let alone publishing its name in a circular like this that 99% of the people of Sudan may not see.”

*Economy pillar*
Al-Wathiq confirmed that national companies are a pillar of the country’s economy according to the current prevailing model in Sudan and most countries of the world, and that supporting these companies is the duty of the regulatory authorities. Al-Wathiq confirmed that he does not object to the procedure in his speech, but the evaluation as part of the procedure and according to his previous knowledge, there is a flaw and sometimes injustice.
He pointed out that there is a difference between (paper) companies established to manipulate export revenues, which is a flaw that must be fought strongly, and between companies that have a spotless record for many years and own industrial institutions inside the country, and in light of this exceptional situation, they stumbled for objective reasons and no party sat with them to discuss their case before issuing such a list, and some of them have balances in foreign currencies inside Sudanese commercial banks that they cannot withdraw.
Wrong Timing :

Banking expert Walid Dalil criticized the Bank of Sudan for banning companies at this time, and said, “It is necessary to know that the country is in a state of war and is in dire need of national capital to manage the war economy,” noting that such decisions are made in a state of peace and economic recovery to punish companies that violate the regulations of the Bank of Sudan, adding that most of these companies were harmed by the war, their assets and properties were looted and their owners were displaced between countries, and some of them lost their lives while fleeing the battles, and he reiterated his confirmation that the Bank of Sudan’s treatments of the economic situation confirm its need for a council of experts from outside the bank to develop solutions and recommendations on how to manage the economic crisis and spare the country from falling into the pitfalls of economic deterioration.
However, Dr. Omar Mahjoub confirmed that these amounts were owed by these companies before the war and therefore they are negligent in a way that does not exempt them from responsibility for the necessity of returning the amounts, and he added, “War and its circumstances do not mean escaping from obligations nor do they mean disrupting justice.”

Fake companies :

At a time when Walid Dalil indicated that these the practices are old since the previous era, where fictitious trade names are opened and exported, then the Bank of Sudan BS demands the export proceeds and is surprised that these companies are fictitious.
He believed that it would have been better for the Bank of Sudan to deal with individuals rather than companies.
Most of these companies are fictitious and are established for the purpose of obtaining export approvals, and then their role ends and new companies are established.
He continued, “The Bank of Sudan is running after a mirage. It must punish the merchants who own these trade names, not the fictitious companies.”
Weak procedures :

Economists considered the ban procedures weak and not followed by legal prosecutions. They confirmed that this is not the first time that the Central Bank CB has banned companies and business names that have wasted estimated revenues from Sudan’s money.
They affirmed the need to grant export licenses to companies that have foreign currency cover in the Bank of Sudan or local banks or have assets registered in the company’s name.
In the event that export proceeds are not paid, their balances or registered assets are confiscated.