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Congo-Brazzaville |
CORRUPTION
Can a poor country, trying to find ways and means of achieving its development, fight against money-laundering?
Congo-Brazzaville is just emerging from thirty years of communism followed by ten years of civil war, and is in the process of rebuilding its shattered economy. Money-laundering is still with us and looks like being present for many a long year. Local and foreign business people are thus enabled to get rich quick, under the protection, it must be admitted, of a number of Congo’s senior personalities.
Grégoire Mouzita, is the United Nations’ representative for central Africa for the international control of drugs (PNUCID). During a seminar on narcotics held in Brazzaville in December, he said: «Corruption is to be found everywhere in Congo, at every level of the administration. This explains why it’s proving extremely difficult to get anti-drugs legislation through parliament; and the same goes for money-laundering — it’s proving virtually impossible to stamp it out.» According to this expert, the situation is exactly the same within many countries of the Economic and Monetary Community of Central Africa (CEMAC) and the West African Economic and Monetary Union (UEMOA).
An interest rate of 30% in 45 days...
During the seminar, some participants had the courage to pin-point a rather shadowy import-export company, called «Salu Humberto Brada» (SHB) which is involved in money-laundering. Previous to this, nobody dared mention this company by name in such a context. SHB is run by an Englishman and by a Congolese from Congo (RDC), Congo-Brazzaville’s immediate neighbour. This particular company, which has been handing out loans in Brazzaville for nearly a year, is neither a bank nor a savings bank. Curiously, it uses an unusual interest rate: 30% in 45 days!
Recently, the Catholic weekly La Semaine Africaine published an unsigned article. The author only gave his E-Mail address — PaulCongo@yahoo.fr. In his article, Paul Congo wonders: «How is it possible to deposit a large sum of money in this establishment (several hundred million CFA, for example) and then withdraw this sum 45 days later with 30% interest? If such is really the case, why bother to use the ordinary banks? Where does the 30% interest come from, especially in a poor country like Congo, where the economy is on its last legs and where the banking system is all but crumbling? Usually, if you want to make a profit from your savings, then these have to be placed somewhere in the money-market and for a period of time — usually the money must remain with the financial establishment (banks, building societies) for a minimum of two or three years so that interest can be generated. In an economy such as ours, which is only now beginning to make ends meet, it’s hard to understand how an investment can come up with a 30% increase in just 45 days. So where does the money come from? Money-laundering is a strong possibility.»
The «Salu Humberto Brada»
Rumour (unconfirmed) has it that the financial house, SHB, had previously been expelled from certain central African countries, where it had tried to establish itself. Its choice of Congo-Brazzaville is surely because the authorities, here, close their eyes to criminal activity. Today, this company attracts whole hoards of clients who are deserting smaller financial establishment (Banks for the Poor). A number of these have seen their liquid assets all but disappearing.
«Salu Humberto Brada», whose honourary president is none other than the First Lady (wife of the President), has promised to build residences, schools, dispensaries. But the people have been impoverished by years of violence and young people find it impossible to get employment. They need ready cash and they need it fast! This has given rise to the establishment of many gambling dens in Brazzaville and Pointe-Noire, Congo-Brazza’s «oil city», some 510 km to the south of the capital. These businesses are owned by Lebanese who are also in the luxury bar-restaurant trade in Brazzaville city centre.
In December 2000, in an attempt to control money-laundering which has become widespread in countries of the sub-region, CEMAC set up an Action Group against Money-Laundering in Central Africa (GABAC). But, ever since its foundation, this particular organisation has done absolutely nothing. PNUCID‘s expert puts this down to the politicians’ lack of willpower. Congolese experts for fighting against drugs, insist: «If successive governments in Congo remain indifferent to the money-laundering problem, it’s as if they are themselves accessories in this evil». Rumours are also circulating that the company responsible for building Congo’s roads (ESCOM), are going about their work using «dirty money».
But the experts — always embarrassed when faced with the question of money-laundering, for fear of losing their positions or of being past over when it comes to promotion — admit that money-laundering widely exists in Congo. One member of the Committee for Fighting against Drugs in Congo, a magistrate, says: «Because our country is fully occupied with trying to develop itself, it unfortunately lacks the means of fighting against money-laundering».
For a few weeks now, there’s been open confrontation between the SHB and the government. On 18 April, Congo’s Finance Minister, Mr. Mathias Dzon, requested the SHB to suspend all banking activities and for its business partners to withdraw all their assets from this bank. In January 2002, the Banking Commission of Central Africa (COBAC), based in Yaounde, Cameroon, had taken the SHB to task and ordered it to end its banking activities, as they failed to meet the standards required by COBAC regarding small business accounts. COBAC took this action to stop similar shady financial activities from being carried on in the five other Member States of the Bank of Central African States. Cameroon had already experienced such carryings on, with a company called «Leadership Academy». Energetic action taken by the Cameroonian Monetary Authority had made it possible to end this company’s financial activities and stop its attempts to establish itself up in the CEMAC region. In a letter to Congo’s Finance Minister, Jean Félix Mamalepot, governor of the Bank of Central African States, said: «Unfortunately, a large proportion of the money banked with this particular company had to be written off, as the company directors left the country in spite of every effort made by the authorities to stop them».
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