IRIN Focus on probe into UNITA’s finances

The UN Security Council is set to hire an American company to investigate the finances of the Angolan rebel group UNITA. The council wants to know more about UNITA’s investment portfolio and international money laundering operations that are fuelling the country’s 26-year civil war. “This move is a clear indication that the Security Council is serious about enforcing sanctions against UNITA, as well as rebels in Sierra Leone,” Security Council president Ambassador Jeremy Greenstock told IRIN. The council committee, which monitors sanctions against UNITA, is drawing up a contract with New York-based Kroll Associates. The company, which has offices in many countries, specialises in international white-collar crime investigation and security issues. “If anyone can unravel the complex financial web around UNITA then it’s Kroll,” said Richard Cornwall of the Pretoria-based Institute of Security Studies. “They’ve worked for the World Bank and the International Monetary Fund (IMF) and are very well placed to undertake this kind of work.” Diplomatic sources told IRIN that Kroll would have very clear terms of reference and would do no more than investigate UNITA’s financial assets. Greenstock said that a decision was taken to bring in Kroll Associates because the UN doesn’t have the expertise to look into such complex financial transactions. “Kroll has a particular expertise that we’re going to use in an attempt to gain more information about where UNITA banks and how they finance themselves,” Greenstock said. Kroll is expected to start its 16-week investigation soon, he added. Greenstock noted that the Security Council has been criticised in the past for approving sanctions against governments and rebel groups but not following them up. The council is expected in the near future to discuss the broader issue of seeking outside expertise, he said. “But there is a strong wish that the United Nations itself should develop a core competence in following up sanctions regimes, and I think that will be a priority for the council.” “Obtaining information on UNITA’s financial dealings is one thing, acting on it is quite another,” Cornwall pointed out. At this stage nobody is certain what Kroll’s investigations will unearth, but Greenstock said it’s final report to the Security Council could be used to pressure member states to enforce the law where it is being contravened. “This information is crucial if we’re going to further tighten sanctions,” Greenstock said. Last week, council members unanimously adopted a resolution extending the mandate of an expert panel which has been trying to track down those dodging sanctions for a further six months. The Security Council imposed a ban in 1998 on rebel diamond exports in an attempt to stop UNITA from financing its war against the Angolan government. Five years earlier, the council imposed an arms and fuel embargo on UNITA. But in a recent report to the Security Council, the five-member panel said sanctions “have driven UNITA diamond trading deeper underground and have made UNITA seek new routes for diamond trading.” The panel estimated that UNITA still smuggled at least US $100 million worth of diamonds out of the country last year and will likely do so again this year. Analysts told IRIN that such sums could keep UNITA’s guerrilla armies in the field for years. “The kind of war UNITA is now waging means they don’t require expensive artillery, armour and aircraft,” one analyst said. Although UNITA’s ability to mine diamonds has been reduced by recent government successes on the battlefield, it is likely that the rebel group maintains a small but valuable stockpile “The question is not whether UNITA has access to diamonds, but how easily it can move them to markets. A strategy of mining and stockpiling high-value stones would ensure that UNITA can always find buyers,” the report concluded. The panel’s initial document, in December, said UNITA was getting round sanctions through a complex network of arms traffickers, friendly African governments and diamond smugglers who use tax havens to move their gems to market. In its latest report, the panel said “the financial transactions related to arms sales have revealed a complex pattern that needs to be exposed by the continuing investigation of UNITA financial assets.” It said new regulations governing the activities and operations of arms-brokering companies are urgently needed. The Security Council should also consider establishing “an international register of the dubious companies involved in sanction-busting,” it said. Although the Security Council’s decision to bring in outside investigators highlights the need to enhance internal expertise in this area, a recent report suggests the UN’s ability to probe shady financial dealings in conflict situations is improving. “The illegal exploitation of the mineral and forest resources of the Democratic Republic of Congo (DRC) is taking place at an alarming rate”, a comprehensive report released last week by a UN panel of experts on the illegal exploitation of natural resources and other forms of wealth of the DRC said. The report singled out Rwanda Uganda and Burundi, accusing them of widespread involvement in exploiting the DRC’s natural wealth and calling for an arms and trade embargo on the three countries. Condemned in some quarters as being biased against rebel backers, the report also pointed the finger at Kinshasa’s principal ally in the conflict, Zimbabwe. “Among all its allies, Zimbabwean companies and some decision-makers have benefited most from this scheme,” the report stated. The report added that Zimbabwe received “interesting” mining concessions in the DRC and Zimbabwean companies, using their influence with the DRC government, developed business partnerships with private companies and parastatals. The report listed five key minerals - coltan, diamonds, copper, cobalt and gold - as being exploited by foreign armies in the DRC in a “systematic and systemic” way. The Security Council’s decision to get tough on UNITA’s illegal diamond dealing came as diamond producers and traders gathered in Brussels this week to hammer out details of an international system to certify the origin of individual gems. The international meeting brought together 43 nations in a bid to set minimum standards for certifying that diamonds exported from African countries are legal and are not being sold to fund conflict. Belgium, which handles 80 percent of world trade in rough diamonds and has come under fire for its lax control of the business, called for a worldwide certification agreement on Wednesday that would ban the trade in so-called blood diamonds, which finance conflicts in Africa. Belgium has negotiated certification agreements with Sierra Leone and Angola. It wants all countries to follow suit, a government official said at the opening of the three-day conference. The trade in blood diamonds is estimated at four percent of total world output, but worth at least US $280 million a year.