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By Stringer 92 - Nov 18, 2006   

As Gedab News reported on November 16th,  the Eritrean regime has begun rounding up people suspected of engaging in hawala, illicit exchange of Nakfa for hard currency.  The list of those arrested includes Gereamlak (owner of Zemenawi Electronics), Wedi Fitewrari and Berhe James, along with 30 other individuals which includes the who-is-who of Eritreaís handful of millionaire class, including some who were deported from Ethiopia.

At minimum, according to the regime's proclamation 101/2005, the individuals will be fined two million Nakfas. But there are other extra-judicial punishments which are likely to be meted out, depending on the regimeís frequently changing priorities.  Of late, the regime has been drumming up the issue of tax avoidance and capital flight, and it is likely to use this reason to justify confiscating their capital, estimated in the tens of millions each.  (The top four are estimated to have a net worth of 70 million each.)  They are also likely to face long prison terms, without the benefit of a trial.

Besides the banks, the sole legal currency exchange center is the ruling party-owned Himbol Financial Services which, ironically, has had its own problems with the law in the United States when it was found to have run unlicensed financial exchange centers.   

Last Updated ( Nov 18, 2006 )
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