Bank Linked to Congolese President’s Brother Enabled Hezbollah Financiers to Bust U.S. Sanctions

New investigative report by The Sentry puts spotlight on a “Terrorists’ Treasury” in the Democratic Republic of Congo

Washington, DC – A new investigative report released today by The Sentry, an investigative initiative co-founded by George Clooney and John Prendergast, spotlights a global web of financial transactions in which a well-connected bank enabled a financier with terrorist ties to bust U.S. sanctions.

Documents obtained by The Sentry detail how individuals and entities subject to U.S. sanctions used a Congolese bank, BGFIBank DRC, to move money through the international banking system. The bank’s CEO is Selemani Francis Mtwale, brother to President Kabila.

The report, “The Terrorists’ Treasury: How a Bank Linked to Congo’s President Enabled Hezbollah Financiers to Bust U.S. Sanctions,” highlights how inadequate anti-money laundering compliance and sanctions enforcement standards at banks can empower a wide range of criminal groups and corrupt actors in Congo and around the world.

John Prendergast, Co-founder of The Sentry, said: “This case shows how the same banks used by kleptocratic governments to divert state assets can also be used by terrorist financing networks. But while it shows how banks can be exploited by kleptocrats and terrorist financiers alike, the fact that these actors continue to rely on the global banking system means that the international community–and the United States government, in particular–has the power to address that dual threat.”

Holly Dranginis, Senior Analyst at The Sentry, said, “It’s time to examine the role of banks in connection to violence and corruption in some of the world’s deadliest places. International counter-terrorism authorities have to be willing to follow money to unlikely places, and work together with banking regulators to ensure thorough due diligence. That will improve counter-terror interventions, and it will also help prevent corruption by government regimes.”

Sasha Lezhnev, Deputy Director of Policy at the Enough Project, said: “This raises serious questions about the Kabila regime’s commitment to fighting global terrorism, as the bank that enabled the Hezbollah financiers to move money was intertwined with the Kabila family. The U.S. government should fully investigate and it should apply much stronger network sanctions and anti-money laundering measures to any senior Kabila regime officials and companies that are found to be connected to these issues.”

• Click here to read the full report: “The Terrorists’ Treasury: How a Bank Linked to Congo’s President Enabled Hezbollah Financiers to Bust U.S. Sanctions.”
• Cliquez ici pour le résumé en français.

REPORT HIGHLIGHTS:

• In 2011 bank employees at BGFIBank DRC raised the alarm with senior officials at the bank, in writing, about a series of transactions. The concern was that the transactions involved companies linked to financiers of Hezbollah.
• The main entities in question were subsidiaries of Kinshasa-based business conglomerate Congo Futur, a company under U.S. Department of the Treasury sanctions. Among the recipients of the warnings was Selemani Francis Mtwale, the bank’s CEO and brother of President Joseph Kabila. But the bank’s relationship with Hezbollah-linked companies continued. BGFIBank DRC even went so far as to request that certain transactions be unblocked by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) after other banks refused to process them. And BGFIBank DRC continued correspondence with at least one Congo Futur-affiliated company in 2016. This raises major questions about the bank’s ability and willingness to fulfill its sanctions and anti-money laundering compliance obligations.
• BGFIBank DRC’s approach to enforcing sanctions has allowed Kassim Tajideen – described by the U.S. government as “an important financial contributor” who “has contributed tens of millions of dollars to Hizballah”— and his network to access the global financial system despite being placed under U.S. sanctions in 2009 and 2010, respectively.
• The documents reviewed by The Sentry also show apparent links between Congo Futur and firms under Kassim Tajideen’s control. These documents indicate that Congo Futur subsidiaries used BGFIBank DRC to operate accounts and make wire transfers after both Congo Futur and Kassim were placed under U.S. sanctions, despite warnings from bank employees that the bank should not do so.
• Congo Futur has continued to thrive in Congo despite U.S. sanctions; it even maintains financial ties to the Congolese government and has received government contracts.
• These continued relations raise serious questions about the Congolese government’s reliability in the fight against global terrorism, transnational crime, and illicit finance.

REPORT RECOMMENDATIONS:

The report calls for higher-level network sanctions, criminal investigations, anti-money laundering measures, improved banking due diligence, and transparency. It recommends:

1. Targeted Sanctions. The United States and European Union should urgently implement two sets of targeted economic sanctions actions:

• The U.S. government should investigate and act pursuant to Executive Order 13224, which is the principal authority used for counterterrorism sanctions, to designate any officials at BGFIBank DRC who the United States identifies as having knowingly undertaken transactions on behalf of Congo Futur, as well as to designate any other entities in the Congo Futur network that the United States identifies as engaged in unlawful activities.
• The U.S. government should investigate and act pursuant to Executive Order 13671 and the European Union should investigate and act pursuant to Regulation (EC) No. 1183 of July 18, 2005 and Regulation (EU) 2016/2230 (2), which are the principal U.S. and EU authorities used for sanctions related to the Democratic Republic of Congo, to designate the networks of senior members of the regime, including financial advisors, Kabila family members, and their companies that the United States and the European Union identify as having engaged in unlawful activities.
• The U.S. government should fully investigate and sanction anyone found responsible for “acts of significant corruption” in connection with the transactions described in this report, pursuant to the Global Magnitsky Human Rights Accountability Act (Public Law 114-328).

The impact of these sanctions actions would be the same: to freeze the assets of any designated individuals and entities and block them from the financial system.

2. Criminal Investigations. The U.S. Department of Justice should expand its investigation into the Tajideen network to evaluate the potential criminal liability of BGFIBank DRC leadership for knowingly doing business with Hezbollah financiers pursuant to the U.S. Patriot Act and the U.S. International Emergency Economic Powers Act (IEEPA). Specialized human rights and transnational crimes units in the United States and Europe should investigate whether entities within their jurisdiction have ties to the Tajideen network, with a view toward any financial facilitation of terrorist activities or human rights violations, including the potential facilitation of crimes occurring in Congo.

3. Anti-Money Laundering/Counter-Threat Finance Actions. The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and financial intelligence units (FIUs) in Europe should immediately investigate the transactions described in this report and, if warranted, issue advisories to banks and other financial institutions. FinCEN should issue an investigative request, pursuant to its authority under Section 314(a) of the Patriot Act, to request that banks search for records related to the individuals and companies involved. If FinCEN identifies specific patterns of money laundering or threat finance, the advisories should state the risk that banks conducting business with BGFIBank DRC may be incurring by processing transactions on behalf of Hezbollah-linked entities. If warranted, FinCEN should also warn of the broader risks evident in the Congolese banking system, specifically the money laundering and threat finance risks related to the corruption of the Kabila regime and business network. This critical step would lead banks to conduct greater vigilance and reporting and could lead to further FIU actions.

4. Bank Due Diligence/De-Risking. Global banks with commercial relationships in Congo should immediately undertake enhanced due diligence on those relationships with banks in Congo, including provision of correspondent banking, trade finance, and other services, while at the same time being cognizant of and avoiding over-compliance and de-risking.

5. Public Corporate Registry. The Congolese government, led by the Ministry of the National Economy and the Ministry of Foreign Commerce, should create a searchable online public registry of all corporate entities formed in the country to improve corporate transparency, public oversight, and accountability.

• Click here to read the full report: “The Terrorists’ Treasury: How a Bank Linked to Congo’s President Enabled Hezbollah Financiers to Bust U.S. Sanctions.”
• Cliquez ici pour le résumé en français.

For media inquiries or interview requests, please contact: Greg Hittelman, Director of Communications, +1 310 717 0606, [email protected].

About THE SENTRY – an investigative initiative of the Enough Project
The Sentry is a team of policy analysts, regional experts, and financial forensic investigators that follows the money in order to create consequences for those funding and profiting from genocide or other mass atrocities in Africa, and to build leverage for peace. Co-founded by George Clooney and John Prendergast, The Sentry is an initiative of the Enough Project and Not On Our Watch (NOOW), with investigative support from the Center for Advanced Defense Studies (C4ADS). The Sentry currently focuses on the corrupt transnational networks linked to those most responsible for deadly violence in South Sudan, Sudan, the Democratic Republic of Congo, Somalia, and the Central African Republic. Learn more at www.TheSentry.org.