Financial Crime World

Saharawi Arab Democratic Republic: A Decades-Long Struggle for Self-Determination

For over three decades, a conflict has been simmering in Western Sahara, a disputed territory claimed by Morocco and the Saharawi Arab Democratic Republic (SADR). The Polisario Front, which declared SADR’s independence in 1976, has been fighting against Moroccan occupation since then.

A Conflict with Far-Reaching Consequences

The conflict has resulted in numerous trade agreements being challenged in court, with several EU member states and international organizations questioning the legality of these deals. In 2016 and 2018, the European Court of Justice ruled that the EU-Morocco Agriculture Agreement and Fisheries Agreement, respectively, cannot include Western Sahara’s resources without the consent of its people.

Challenging Trade Agreements

  • The Polisario Front has attacked these agreements in court, citing UN resolutions, the Principle of Permanent Sovereignty over Natural Resources, and the Principle of Self-Determination of Peoples.
  • The lawsuits have caused reputational, supply-chain, and legal problems for many businesses operating in or trading with Western Sahara.

EU-Morocco Deals in Question

The EU has several trade agreements with Morocco, but these deals are under scrutiny due to their lack of consent from the Saharawi people. The Polisario Front has accused companies like BNP Paribas, Société générale, Crédit Agricole, Axa Assurances, Transavia, and UCPA of colonization crimes for doing business with an illegal occupier.

Operational Risks

The conflict in Western Sahara poses significant operational risks for businesses. A war in the territory could bring more problems related to organized crime filling the vacuum. Traffickers and terror groups may exploit the anarchy, as seen in Libya and other parts of the Middle East and North Africa (MENA) region.

Sanctions Risks

  • There is also a risk of sanctions being imposed due to the moral uncertainty surrounding trade agreements in the region.
  • Recently, 53 Norwegian NGOs called on their government to act at the UN Security Council, while other organizations have called for institutions to impose sanctions on Morocco for violating human rights in the territory.

Reliable Information

To navigate these complex threats, companies need reliable information and sound risk assessments. Monitoring the situation through media, corporate and institutional communications, and enhanced due diligence is crucial.

Mitigating Risks

  • Adverse media screening services and due diligence reports can help businesses assess and prevent risks, while also ensuring regulatory compliance and reputational integrity.

Conclusion

The conflict in Western Sahara highlights the importance of understanding the political landscape and the risks associated with doing business in disputed territories. Companies operating in or trading with Western Sahara need to be aware of the legal and moral implications of their actions and take steps to mitigate potential risks. Reliable information and sound risk assessments are key to navigating this complex environment.

About the Author

Davide Contini is a researcher for Dow Jones Risk & Compliance, covering Italian and Francophone sources. He has served as a board member of Western Sahara Resource Watch since 2018 and holds a master’s degree in international relations and diplomatic affairs from the University of Bologna.