Financial Crime World

Western Sahara Conflict Re-Emerges: Business Risks Soar

The conflict between Morocco and the Polisario Front over Western Sahara has re-erupted, posing significant implications for global businesses. The dispute, which has been ongoing since 1991, centers on Morocco’s claims of sovereignty over the territory and its efforts to exploit its natural resources without the consent of the local population.

Background

The conflict has already had a significant impact on international trade. The European Court of Justice (ECJ) has ruled that the EU’s trade agreements with Morocco cannot include the territory of Western Sahara, citing principles of self-determination and permanent sovereignty over natural resources.

Companies Accused of Committing “Colonization Crimes”

The Polisario Front has accused several major companies, including:

  • BNP Paribas
  • Société générale
  • Crédit Agricole
  • Axa Assurances
  • Transavia
  • UCPA

of committing “colonization crimes” in Western Sahara. The front has also denounced the EU’s trade agreements with Morocco as illegal and called for international sanctions against Morocco.

Risks for Businesses

The re-emergence of the conflict poses significant risks for businesses operating in the region, including:

  • Companies involved in Western Sahara may face legal challenges and reputational damage if they are found to be violating international law.

Operational Risks

  • The conflict could lead to increased hostilities and uncertainties about doing business in Western Sahara, making it difficult for companies to operate in the region.

Sanctions Risks

  • There is a risk that international sanctions may be imposed on Morocco or other parties involved in the conflict, which could have significant implications for businesses operating in the region.

Mitigating Risk

To navigate these risks, companies are advised to:

  • Stay informed about developments in Western Sahara
  • Design business continuity plans and emergency protocols
  • Monitor the situation through media and corporate communications
  • Conduct enhanced due diligence on any transactions or investments involving Western Sahara

Expert Insights

Davide Contini, a researcher for Dow Jones Risk & Compliance, notes that “reliable information is key in complex situations like this. Companies need to be aware of the apparent risks and take steps to mitigate their exposure.”

Conclusion

With the conflict set to continue, businesses operating in Western Sahara or with interests in the region would do well to stay informed and adapt to changing circumstances to minimize their risk exposure.

About the Author

Davide Contini is a researcher for Dow Jones Risk & Compliance, where he uses negative news from reputable sources to assess risk for companies. He has expertise in English-, French-, Spanish-, and Italian- language research and has a vast knowledge of the political environments of North and Francophone Africa.