By Sami Zaptia.
London, 15 June 2017:
In attempting to trace lost Libyan assets, a UN report has concluded that in financial transactions by former Qaddafi regime members post the Libyan 2011 revolution and the international freeze on them, there exists a ‘‘complexity of the organization of the finances of former regime members’’ and that ‘‘many of these transactions are handled in large sums of cash’’.
The conclusions were made in the 299-page UN Libya Experts Panel report 2017 released in the first week of June.
The report said that ‘‘The tracing of these funds will require significant resources and a dedicated effort. In the Panel’s view, this is impossible until stability in Libya is restored and Libyan investigators are empowered by an indisputable mandate from an uncontested authority’’.
‘‘Nevertheless, very large amounts of money — millions in hard currency — continued to move through these accounts during the years following the revolution. Some of these movements appear suspicious, including large payments of dividends or transfers from a company that was dissolved on 21 October 2009’’.
‘‘The suspicious movements described above indicate that the entities involved could be, or have been, front companies. Taking into account the established previous relationship between the business executives, their companies and Hannibal Qaddafi, this raises the possibility that these individuals continue to manage funds for the listed individual, which would be a violation of the asset freeze’’.
‘‘The Panel is analysing the bank accounts of three suspected, interlinked, front companies for the late Mutassim Qaddafi, based in Malta. The first, Mezen International Limited, was no longer active upon the imposition of the asset freeze on Qaddafi, and its relevance lies solely in the fact that it shows pre-existing relations and linkages. When its main account was closed in June 2010, the remaining balance of over €55 million was transferred to a second company, Capital Resources Limited. The company’s accounts in Malta were frozen under the sanctions’’.
‘‘However, the main source of funding for the Mezen account in 2010 was a third company, Moncada International Limited, which transferred over €40 million that year in three instalments. In addition, Moncada received €3 million from Mezen two weeks before the latter closed its account. The Maltese authorities explained to the Panel that Moncada was struck off the companies register in September 2013’’.
‘‘Nevertheless, company accounts show transfers of significant amounts of money after 26 February 2011, when Qaddafi was listed. Between 26 February and 14 July 2011, €10 million was transferred out of the Moncada account, which was never frozen. The Panel has recently written to Malta to underscore that it is crucial to trace that money and investigate its origin’’.
‘‘The Panel has also enquired with Italy about the status of an expensive flat allegedly owned by Mutassim Qaddafi. The €5.5 million flat appears to have been bought by a front company, Diamond VIP Service SRL. One of the partners of that company, Saleh R. KH. Drah, was a director at Moncada International Limited. The title deed is in the name of Ali Ahmed Beinen, another partner in Diamond VIP. Beinen is suspected by Libyan litigators of having been a close associate of Qaddafi’’.
‘‘In the month running up to the purchase of the flat, Beinen also received €91,000 worth of consultancy fees from Moncada. The temporary tenant of the flat, Vanessa Hessler, has publicly declared having had a relationship with Qadhafi. She also initiated a case at a court in Rome against Beinen, claiming that she received the flat as a gift from Qadhafi, who was the real owner. Italy replied to the Panel that there were currently no grounds to connect the property to Qaddafi and that it could therefore not be frozen’’.
‘‘The Panel continues its investigation into the sources of an account in the name of the Ugandan company Aurelius Holdings, where funds were held on behalf of Saadi Qaddafi with the intention to move him from the Niger to Uganda. The account held over $1 million, the large majority of which originated from four sources: three bank transfers and one cash deposit. All transfers to this account constituted violations of the asset freeze’’.
‘‘The depositor of the cash transfer was identified as Ugandan Paul Nkangi, personal assistant to Habib Kagimu, who was co-director of Aurelius and one of the two signatories of its bank account. There are conflicting statements on how this cash was obtained, none of which the Panel could confirm. The Panel is aware that Qaddafi had access to funds of at least $2 million while residing in the Niger, including large amounts of cash’’.
‘‘The Panel has identified a company that made one of the transfers to Aurelius, Al-Firdaws International Trading Company, based in Tunisia. The Tunisian authorities confirmed the involvement of Al-Firdaws to the Panel and reported that the company accounts were frozen on suspicion of money-laundering. Importantly, Al-Firdaws received a cash deposit of $600,000 on the same day it transferred $400,000 to Aurelius’’.
‘‘The Panel also identified a second company that made a transfer to Aurelius, Adena Way General Trading. Adena Way is a company based in the United Arab Emirates, where it is managed by a Libyan national, Adel Abdalla Omar Deyab. Its company accounts in the United Arab Emirates did not show any transfer to Aurelius and were closed in August 2014. However, it also holds an account in Tunisia, and it is from this account that the transfer to Aurelius was made under the pretext of paying for a shipment of tea’’.
‘‘The United Arab Emirates accounts show systematic incoming and outgoing transfers of large and relatively round sums, typical for money-laundering operations. They also show a connection with the Tunisian account for Adena Way. The payment from the Tunisian account of Adena Way to Aurelius was preceded by a payment from a Libyan company to Adena Way. The Panel is investigating this transfer’’.
‘‘The origin of the third transfer could not be verified. The Panel has twice requested the assistance of Uganda in providing copies of all relevant banking documents and setting up a meeting with Nkangi and Kagimu. These requests have remained unanswered’’.
‘‘The variety of sources feeding into the Aurelius account opened in support of Saadi Qaddafi’s potential move to Uganda show the complexity of the organization of the finances of former regime members. It also shows that many of these transactions are handled in large sums of cash. The tracing of these funds will require significant resources and a dedicated effort. In the Panel’s view, this is impossible until stability in Libya is restored and Libyan investigators are empowered by an indisputable mandate from an uncontested authority’’.
‘‘Information received by the Panel shows that Hannibal Qaddafi received large and systematic payments from a group of at least four companies for years before the revolution in 2011: Mariner for Maritime Transport, Golden Delta Mariner Shipping, Diamond Delta Mariner Shipping and Um al Houqol. These four companies are closely connected in terms of their shareholders, management and location’’.
‘‘In the case of Mariner for Maritime Transport, documentation is available that shows that Qaddafi was recognized as a board member of the company. However, Libyan sources suspect that he was in fact the owner of the company’’.
‘‘The income of Mariner appears to have originated mainly from the oil and gas sector of Libya: the National Oil Corporation, Mabruk Oil Operations, Zawiyah oil and gas refinery, the Brega Marketing Company and several others. Monthly payments of over several hundred thousands of euros and United States dollars were further transferred from these company accounts to various destinations. Some of these transactions were identified as direct payments into a personal bank account of Hannibal Qadhafi, mentioning unlikely descriptions such as “personal loan”. It is not clear to the Panel which services, if any, Mariner would have provided to the above-mentioned companies to justify these payments’’.
‘‘After 26 February 2011, the transfers of funds into the various Mariner accounts stopped. However, the business executives continued to be involved in numerous international companies with accounts or activities abroad, including in Cyprus, Italy and Tunisia. The real activities of these companies, many of which have similar names, are not clear’’.
‘‘Nevertheless, very large amounts of money — millions in hard currency — continued to move through these accounts during the years following the revolution. Some of these movements appear suspicious, including large payments of dividends or transfers from a company that was dissolved on 21 October 2009’’.
‘‘The suspicious movements described above indicate that the entities involved could be, or have been, front companies. Taking into account the established previous relationship between the business executives, their companies and Hannibal Qaddafi, this raises the possibility that these individuals continue to manage funds for the listed individual, which would be a violation of the asset freeze. The Panel is pursuing its investigations with the relevant Member States’’.
‘‘The Panel has made enquiries with the United Kingdom regarding an ongoing investigation into the assets of individuals close to the former regime, but no response has so far been received’’.
‘‘The Panel is investigating several reported cases of stolen Libyan assets that are under the control of a listed individual (or entity), or at risk of misappropriation, or both. The presence of such assets has been reported in several countries on the African continent. In cases where those funds are under the control of a listed individual, they need to be frozen. In cases where one of the competing political factions in Libya is attempting to obtain them, it needs to be ensured that they are not misappropriated or used to fund any actions that threaten the country’s peace and security. Either way, full transparency on the alleged cases is required’’.
‘‘The urgent need to identify and secure such assets was an important driver of the reinstitution of a Stolen Assets Recovery Unit within the Central Bank (of Libya) in August 2016. The Unit reports directly to the Central Bank Governor in Tripoli and is also reliant on cooperation with the Litigation Department of the Ministry of Justice of Libya and the Attorney General’s office. The Panel is not convinced that all three parties involved are fully committed to the Unit’s efforts. The Unit has actively reached out to various stakeholders. It does not appear that the Presidency Council has been involved in creating or directing the Unit’’.
‘‘The Panel reported that all its investigations into stolen assets are also being considered by the new Stolen Assets Recovery Unit in Libya’’.
With regards to physical assets it is investigating in West Africa, UN Libya Experts Panel reported that ‘‘The Panel is investigating independent reports on the involvement of a listed individual in storing large amounts of physical assets in several locations in West Africa. It is alleged that the operation to hide large amounts of cash and some gold in West African countries was organised by Abdallah al-Senussi in 2011. Six sources have alerted the Panel that attempts are being made to move some of these assets back to Libya and to possibly make them available to some of Libya’s competing political and military stakeholders’’.
‘‘In a first case, four independent sources reported to the Panel that USD 560 million, in USD 100 denomination, is kept by a group of Libyans in Ouagadougou, Burkina Faso. This group has attempted to transfer the assets to a third country through a local company: “Societe Transit Transport Convoi International (STTCI)”.
‘‘Several sources have explained to the Panel that they have travelled to Burkina Faso and inspected the cash, which is stored in metal chests. It is reported that authorities in Tripoli, al-Bayda and Tobruk have attempted to obtain the USD 560 million. Specifically, the involvement of NSG’s prime minister al-Ghweil, Libyan ‘Interim government’ prime minister al-Thinni, HoR speaker Saleh and intelligence head Mustafa Nuh has been reported. Although the transfer of these assets has failed for now, the Panel has seen documentation showing that the logistical preparations were welladvanced. Groups involved in the negotiations expect to receive a commission of 10 or even 35 per cent’’.
‘‘However, the Burkinabe authorities have reported to the Panel that no company by the name of STTCI is known at the company register or holds any bank accounts in Burkina Faso. They confirmed that the alleged STTCI post office box in Ouagadougou listed on the documents exists, but that it is owned by an individual. In addition, the box frequently receives mail for addressees unknown to the owner. These include a businessman with well-known links to Libya’’.
‘‘In a second case, sources told the Panel that physical assets are being kept in Accra, Ghana. At least until February 2016, they were allegedly stored in boxes with an International Committee for the Red Cross logo at the premises of an ‘international human rights organization’, Le Comité International pour la Protection des Droits de l’Homme (CIPDH). The Panel has contacted France where the organization has its headquarters. The Panel has seen a report on the matter filed with the Ghanaian police and has subsequently contacted Ghana to ask for clarification. The Panel’s letter, and another reminder, have remained unanswered’’.
‘‘The Libyan in charge of the assets in Ghana is reported to be Mohamed Saleh al-Mahmoudi. It appears that agents reporting to the LNA have tried to ‘recover’ the assets. Unrelated to the LNA attempts, some of the assets were allegedly moved to another country’’.
‘‘Additional countries in the region have been mentioned in conversations with the Panel but no documentation or details were provided’’.
‘‘Previously, the Panel investigated several pieces of documentation alleging that a large quantity of physical assets, potentially belonging to a listed individual, was stored in South Africa. However, at that time, the documentation was considered to be unreliable and the investigations could not confirm the allegations’’.
‘‘In 2016, the Panel received new information, including documentation. According to this documentation, an attempt was made in 2013 to use the alleged assets as payment for a multi-billion dollar arms deal between several South African defence industry companies and the “Libyan Air Force” and “Air Territory Defense Forces”. The volumes and types of the materiel requested by the Libyan party suggest that a large amount of money was indeed readily available and the negotiations appeared to be relatively advanced. The Panel has interviewed, separately, two people directly involved in the attempted deal. Both claim that the materiel was to be paid for by ‘hidden’ assets from the Qaddafi regime already present in South Africa’’.
‘‘In 2013, agents claiming to represent the Libyan government visited South Africa to discuss the delivery of a wide range of materiel including tanks and attack helicopters. Correspondence seen by the Panel shows frequent contacts between the brokers and managers from the Denel company and its subsidiaries’’.
‘‘The Panel wrote to South Africa to request further information regarding these negotiations and particularly details about the financial sources that would have allowed for such a large transaction. However, no reply was received’’.
‘‘The Panel has viewed additional documentation allegedly confirming the presence of Libyan assets in South Africa. None of these documents were convincing. For some documents, the Panel was not allowed to take copies for further investigation. Other documents that were shared contained insufficient information to verify their contents and did not prove the amount, origin or location of the alleged assets’’.
‘‘The Panel has reached out to South African officials mentioned in the new documentation to verify their contents. To date, none has responded to the Panel’s outreach or requests for information’’.
‘‘The Panel has spoken to numerous Libyan politicians and civil servants who confirm that several ‘official’ delegations have travelled to South Africa to meet with the ANC leadership and discuss the issue of the return of Libyan assets’’.
‘‘The Panel has obtained documentation indicating that two large transfers were possibly made in the second half of 2011 on behalf of the Libyan Africa Investment Portfolio between bank accounts in South Africa and Kenya. The total amount transferred to an account at a branch of the CFC Stanbic Bank branch in Kenya was USD 800,000,000. Documentation received by the Panel shows payment authorisation by Bashir Saleh al-Shrkawi from a branch of the Standard Bank South Africa’’.
‘‘The management of LAIP has explained to the Panel that it has no knowledge of the beneficiary account. It had received a similar report and conducted its own investigation in 2013, but could not confirm that such a transaction had taken place’’.
‘‘If the information in the documents is accurate, these transfers would show that hidden Libyan funds are indeed accessible to members of the former regime in South Africa. Bashir al-Shrkawi currently resides in, or at least frequents South Africa. He has been named by numerous public and private sources as the person who manages funds from the former regime hidden in South Africa and throughout the rest of the continent. Although he used to head the LAIP until 2009, he had no formal relationship with the fund in 2011’’.
‘‘The Panel has interviewed Bashir Saleh al-Shrkawi who denies any knowledge of any assets of the former regime in Africa, other than the ones officially on record at the LIA. He described reports on ‘hidden Libyan assets’ in Africa as “mirages”. The Panel has requested information from Kenya but its letter has remained unanswered’’.
‘‘The Panel has met with two competing groups of brokers that try to recover ‘stolen assets’ in exchange for a fee or a percentage. Because they are profit-driven, they have not been forthcoming with information. Furthermore, both groups had previously provided the Panel with unreliable or false documentation’’.
‘‘Bearing in mind the current political division in Libya, and the need of both the PC and competing governments to obtain access to funds, such secrecy creates a risk for misappropriation. Clearly, the brokers report to various authorities, regardless of whether they support the PC, hoping they can further their case. Therefore, the Panel has urged both groups to share information that would allow it to monitor the issue’’.
‘‘Following the Panel’s letters, information sharing by both groups has improved but still more transparency is needed. Furthermore, they have tried to increase their national and international legitimacy through interacting with the Panel. However, it is not in the Panel’s mandate to confirm the mandate of any broker and certainly not at this stage of the political process’’.
‘‘Finally, it is possible that at least some of these cases are, in fact, scams. The Panel has received reports that some individuals have lost money while trying to obtain the alleged assets. Nevertheless, several other cases documented by the Panel show that former regime members still have access to relatively large amounts of funds, including cash’’.
On the implementation of the travel ban ‘‘The Panel made the following observations regarding the current location and movements of listed individuals. Safia Farkash Al-Barassi confirmed that she is currently residing in Egypt, while requesting an exemption for travel to Oman for humanitarian reasons. The Committee approved this request’’.
‘‘The Panel confirmed the presence of Hannibal Qaddafi in Lebanon. Lebanon provided information that Qaddafi had been residing “in [the Syrian Arab Republic] as a political refugee”, after which he was “abducted by an armed group and was brought into Lebanon illegally on 6 December 2015”. After being released by his kidnappers, Qaddafi was detained by the Intelligence Branch of the Directorate General of the Lebanese Internal Security Forces’’.
‘‘Other sources confirmed that Hannibal Qaddafi had previously spent time in the Syrian Arab Republic, in Damascus. The latter State has not replied to the Panel’s request for clarification. According to Lebanon, and as supported by other sources, the travel of Qaddafi to Lebanon took place without its knowledge or permission, and is therefore not a violation but an instance of non-compliance. 289. From the available information, it appears that the travel to the Syrian Arab Republic of Hannibal Qaddafi constituted a violation of the travel ban’’.
In concluding this section of its 299-page report, the panel made a number of recommendations. Recommendations. To the Security Council it recommended that it required ‘‘Member States to report on the presence of stolen Libyan assets on their territory, prior to their return to the Government of Libya, and on any possible relation to listed individuals and entities’’.
To Libya it recommended that it ‘‘provide the necessary access, support and resources to the Stolen Assets Recovery Unit of the Central Bank of Libya’’.
To UN Member States it recommended that they ‘‘provide the necessary access and support to the Stolen Assets Recovery Unit of the Central Bank of Libya’’.
