Financial Crime World

Western Sahara Conflict Reaches Boiling Point: EU Trade Agreements Under Scrutiny

A long-standing conflict between Morocco, Algeria, and the Polisario Front over Western Sahara has reached a critical juncture, threatening to disrupt three decades of relative peace in the region.

Background

The dispute centers around Morocco’s claims to the territory, which are rejected by the Polisario Front and the international community. In 1991, Morocco agreed to organize a referendum on independence with the newly created MINURSO (United Nations Mission for the Referendum in Western Sahara), but negotiations have since failed to reach a compromise.

Flawed Trade Agreements

Morocco has become the second-largest exporter of phosphates in the world, with numerous projects for renewable energy parks in Western Sahara. However, these agreements have been attacked by the Polisario Front in court, citing violations of UN resolutions and principles of permanent sovereignty over natural resources and self-determination.

  • The lawsuits, which began in Europe, have caused reputational, supply-chain, and legal problems for many businesses elsewhere.
  • The European Court of Justice has issued judgments on two EU-Morocco trade agreements, ruling that they cannot include Western Sahara’s territory without the consent of its people.

EU Trade Agreements Under Scrutiny

The EU holds several trade agreements with Morocco, but these are now under scrutiny due to the legal flaws. The Polisario Front has denounced six major companies operating in the region for “colonization crimes” and is seeking compensation.

Business Risks

  • Increased hostilities could bring uncertainties about doing business in the territory.
  • Sanctions risks also loom due to the moral uncertainty surrounding trade agreements.
  • Companies need reliable information to navigate these complex threats.

Solution

Dow Jones provides businesses with sound information and risk assessments through its risk & compliance database, due diligence reports, and advanced adverse media screening services.

About the Author

Davide Contini is a researcher for Dow Jones Risk & Compliance and an expert in Italian and Francophone sources. He serves as a board member of the Brussels-based NGO Western Sahara Resource Watch and has worked as a lobbyist for the organization.