Ethiopia: Legal Implications of Banning TPLF Affiliated Companies

12/04/2020 Business, Ethiopia, World



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In his recent statement, the Attorney General recently announced that the bank accounts of financial institutions and companies affiliated with the Tigre People’s Liberation Front (TPLF) have been frozen.

The statement said the bank accounts were frozen due to allegations that the companies had been financially sponsoring acts of ethnic violence and terrorism, and that they conspired with the TPLF to overthrow constitutional order with force.

In addition, sufficient evidence is found to investigate allegations of tax evasion and corruption, said the Attorney General. As a result, it announced that the movable and immovable assets of the institutions, including their bank accounts, would be frozen from November 14, 2020.

The Attorney General noted that the ban was necessary because there was ample evidence that companies were trying to misappropriate their assets, and it was believed that it was appropriate to keep the assets under control until the decision is made.

Sur Construction, Mega Printing Plc., Gun Commercial Plc., Effort Electrical Business, Trans Ethiopia Plc., Mesfin Industrial Engineering Plc., Selam Public Transport SC, Effort Design and Construction Plc., Effort Plc. They are among the companies that have been banned.

Experts in the field explain that the Attorney General’s ban on financial and commercial entities affiliated with TPLF has a legal basis. They also point out that the action will have two positive results. Legal experts explain that if financial and commercial institutions are involved in the alleged crimes, the ban will help prevent money misappropriation from occurring.

Tsegaye Demeke, a lawyer and professor at Wachamo University, recently told the Amharic daily Addis Zemen that the action taken by the Attorney General against the organizations is well founded. Every organization has a purpose. “If there is a suspicion that it is operating outside of that purpose, the government can suspend it at any time, conduct an investigation and ban it if there is sufficient evidence.”

The ban on TPLF affiliated organizations has a legal basis. It is backed by Ethiopia’s criminal law, anti-terrorism law and anti-corruption proclamation. The Anti-Corruption Proclamation and the Anti-Terrorism Law clearly establish that organizations with legal status are criminally liable. In addition to the regular criminal law, the Anti-Corruption Proclamation 881/15 and the new anti-terrorism law stipulate that if there is sufficient evidence of suspected corruption, your accounts can be suspended and investigated.

There has been one common legal process in the world for centuries and one more common law for the last two decades. Before two decades, individuals were responsible and accountable for the crime they committed, but institutions were not. But that trend has changed in the last two decades.

Tsegaye said that in the last 20 years, it has become common sense that institutions should be held accountable for crimes, as crime is becoming more complex and finances are being used to orchestrate crimes.

He also explained that the world has come to understand that it is important to apply the principle of accountability that applies to prosecute criminal offenses of individuals in the case of financial institutions.

According to Tsegaye, following this global trend, Ethiopia has criminalized institutions as well as individuals. Investigations are required by law if there is evidence of involvement in criminal activity. Various legal frameworks indicate that they could be investigated and prosecuted.

Tsegaye further explained that following this legal basis, the Attorney General has imposed sanctions on financial and commercial institutions affiliated with the TPLF. The Anti-Terrorism Law stipulates that if these organizations are caught involved in terrorist activities in one way or another, they can also be classified as terrorists beyond a legal charge.

In fact, if there are organizations classified as terrorists, they should be classified as such by the House of People’s Representatives. No entity can be classified as a terrorist without being classified as such by members of parliament.

In the meantime, if the Attorney General has sufficient evidence against the institutions, he can conduct an investigation with the National Intelligence and Security Agency and the Federal Police, he said.

According to Tsegaye, these organizations have benefited from the previous system in terms of taxes and other aspects, whereas this was not the case for companies not affiliated with the TPLF. As a result, he noted that many of these institutions did not have a good image.

Tsegaye stressed that great care must be taken so that the institutions do not become a source of political resentment due to their past special benefits. If any of these institutions was not involved in the crime; they should not be stigmatized or hurt. Therefore, great care must be taken.

The ban was a precautionary measure as it has benefits and objectives. The crackdown on 34 TPLF affiliated organizations, on the one hand, will help prevent further damage. On the other hand, it will play an important role in reducing crime by preventing them from re-supporting criminal activities.

Based on Tsegaye’s explanation, unrestricted property can be sold and transferred in a number of ways. It can also be moved from one place to another. But if it is prohibited, this can be prevented. Institutions can withdraw money if the account is not blocked.

And if they can hide money, it is very dangerous. But if it is prohibited, they will not be able to withdraw it. Preventive anti-money laundering measures have been used to prevent crime, and beyond that, it is possible to use the money in the bank to compensate for the damage, he said.

Tsegaye said those involved in the crime must be investigated immediately and legal action taken. On the other hand, those who are above suspicion should be released and the ban lifted.

It must be determined immediately whether the institutions are involved in a crime or not. He also said that if these institutions are involved in acts of genocide, terrorism and other crimes, measures can be taken, including the revocation of their licenses and the confiscation of their assets.

Suspicious, banned or investigated institutions have a duty to provide accurate information to assist in the investigation process. Therefore, they must provide information without complaint, Tsegaye said.

The investigation must be carried out quickly and those involved in the crime must be held accountable. If they are not involved in the crime, they must be reinstated immediately. This is because they have a large number of employees, provide services to others, and pay taxes to the government.

Tsegaye said there is no law in Ethiopia that requires reimbursement to the organization or individual who has been suspected of a crime and ultimately finds himself above suspicion. Thus, institutions can be suspended for one year and released, even if they are not guilty of any crime.