US urges regional governments to block South Sudan war money

KAMPALA, Uganda (AP) - A U.S. Treasury official is urging East African governments to tighten the loopholes that allow illicit money from war-torn South Sudan to cross into regional capitals.

Under Secretary for Terrorism and Financial Intelligence Sigal Mandelker said in Uganda Monday that authorities in neighboring countries like Uganda must make it clear that "corrupt money is not wanted here."

It is widely believed that many South Sudanese government officials have invested heavily in real estate in cities such as Kampala, the Ugandan capital, where it is still possible to pay cash in real estate transactions.

"When it comes to South Sudan, for obvious reasons Uganda is of particular importance to us," she told reporters at the U.S. Embassy. "We also know that much of the open source reporting indicates that South Sudanese elites are hiding assets and buying property right here in Uganda."

The U.S. is committed to collaborating with local authorities to "really put the kind of financial pressure on those South Sudanese individuals that we think is necessary to ultimately get us to a peaceful result," she said, adding that Washington is "going to continue to pressure them to take the actions that we think that they must take."

South Sudan has been in civil war since December 2013. Advocacy groups say the international community should play a stronger role in fighting the corruption in the oil sector corruption that fuels the conflict.

Watchdog groups The Enough Project and The Sentry praised the U.S. official's visit to sub-Saharan Africa, saying it will increase pressure on "regional enablers" of South Sudan's conflict.

"Actions in Uganda to seize the proceeds of corruption and stop the flow of ill-gotten gains are necessary to push South Sudan's leaders toward peace," the groups said in a joint statement. "Laundering the proceeds of corruption is also in direct violation of Ugandan law, which raises significant concerns about Uganda's implementation of international standards for combatting anti-money laundering and counter terrorist financing, and presents an ongoing impediment to Uganda's efforts to develop as a commercial center in the region."

Mandelker will also visit Kenya and Congo, which is experiencing renewed violence in the east.

The U.S., the largest donor of humanitarian aid to South Sudan, has imposed sanctions on some individuals such as Benjamin Bol Mel, an official who once served as a financial adviser to President Salva Kiir. At least three South Sudanese military figures are subject to U.S. sanctions. The world's youngest country is also under a U.S. arms embargo.

South Sudan's war, often waged along ethnic lines, has persisted despite multiple cease-fire agreements.