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DA Slams Alleged Ties Between DBSA and Sanctioned Russian Bank Amid Geopolitical Tensions

Published October 26, 2024
10 days ago

In a recent and startling revelation involving the Development Bank of Southern Africa (DBSA), the Democratic Alliance (DA) has voiced severe opposition to any purported financial relations with VEB.RF, the Russian state-controlled bank. The controversy arose following announcements by the Russian News Agency of a supposed agreement with South Africa's DBSA, only to be met with an ambiguous disclaimer from the latter, who denied entering into any credit line arrangement using deliberately complex legal language.





This kind of interaction is particularly worrying for several reasons. Foremost, VEB.RF has been on the receiving end of global sanctions due to questionable activities, further amplified by Russia's ongoing conflict in Ukraine—a war that has prompted a unified international stance involving hefty punitive measures. Thus, the DA has questioned the DBSA's judgment, challenging the rationale for initiating discourse with VEB.RF especially, when the world is actively condemning Russia's military aggression.


Tarnishing South Africa's standing on the global stage, the DA posits, could be a dire consequence of such dealings. Any connection with entities enduring sanctions, especially those implicated in financing the war, would cast doubt on South Africa's controversially neutral stance and may imply an infringement of international law.


The DA’s criticism extends to the reputational harm and the risks of engaging with entities like VEB.RF, which boasts a troublesome history of employing spies abroad, as evidenced by espionage confessions of its employees within the United States. At stake is not only the country's reputation but also economic security, as flagged by the DA with reference to the recent decline of the Rand's value on the same day the alleged DBSA-VEB.RF agreement came to light.


These concerns are exacerbated by South Africa's presence on the Financial Action Task Force's (FATF) grey list, highlighting the country's requirement to avoid even the perception of shady financial interactions. The DA also raises the alarm on significant financial and sanction risks that could so readily accompany such an agreement when considering that trade with Russia constitutes a mere 0.2% of the country's exports.


To that effect, the DA has not shied from taking action. It demands, with urgency, that Boitumelo Mosako, the CEO of DBSA, disclose detailed records of interactions with VEB.RF, stipulating that failure to do so would require her parliamentary appearance for a thorough accounting. The party has also gone ahead to file a Promotion of Access to Information Act (PAIA) request concerning the DBSA’s engagements and agreements at the BRICS summit.


In a stern conclusion, the DA advocates for the South African government to stand firm against collaboration with regimes that flout international regulations and human rights, warning that any dalliance with entities such as VEB.RF endangers the country's esteemed democratic values and might invite severe fiscal liabilities.


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