For those who have not been not following World-Check's running commentary on the Eritrean role in the Horn of Africa hostilities for the past year*, regional rivalry has caused long-time adversaries, Ethiopia and Eritrea, to align themselves with opposing factions in the conflict in Somalia. Huge quantities of weapons have been transferred to an Al-Qaeda affiliate by Eritrea, according to US sources.

Eritrea's logistical and financial support for Al-Shabaab a/k/a/ The Youth [UID 610115], the former youth wing, and now active military arm, of the Union of Islamic Courts [UID 535293], has drawn strong American criticism, which will probably now manifest itself in a state sponsor of terrorism label.

If you want to know the probable consequences of such a designation, just look at the present restrictions upon the other nations that currently have such status under US law:

• The Republic of Cuba

• The Democratic Peoples Republic of Korea (DPRK) a/k/a North Korea

• The Islamic Republic of Iran

• Syrian Arab Republic

• Republic of the Sudan

Are your clients trading with Eritrea? As the country was a former British Protectorate and Italian colony, compliance officers at UK and Italian financial institutions will want to pay particular attention to this question.

World-Check will be monitoring the situation, and further information will be published as further developments occur. Any OFAC pronouncement will result in an immediate article in real-time.   __________________________________________________________________________________________________________
* Eritrea is supplying Radicals in Somalia, World-Check 28 July, 2006; Alert on possible Sanctions against Eritrea, World-Check 27 July, 2007.