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Viewing cable 09MAPUTO713, RISING CONCERNS ABOUT NARCOTRAFFICKING AND MONEY
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Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
09MAPUTO713 | 2009-07-01 04:55 | 2010-12-08 21:00 | SECRET//NOFORN | Embassy Maputo |
VZCZCXRO3029
RR RUEHBZ RUEHDU RUEHMR RUEHRN
DE RUEHTO #0713/01 1820455
ZNY SSSSS ZZH
R 010455Z JUL 09
FM AMEMBASSY MAPUTO
TO RUEHC/SECSTATE WASHDC 0443
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHLO/AMEMBASSY LONDON 0430
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RUEABND/DEA WASHDC
RUEAWJA/DEPT OF JUSTICE WASHINGTON DC
RHEFDIA/DIA WASHDC
RUCNFB/FBI WASHDC
RHEHNSC/NSC WASHDC
S E C R E T SECTION 01 OF 03 MAPUTO 000713
SIPDIS
NOFORN
E.O. 12958: DECL: 06/25/2019
TAGS: SNAR EFIN KCOR PTER PGOV PREL MZ
SUBJECT: RISING CONCERNS ABOUT NARCOTRAFFICKING AND MONEY
LAUNDERING IN MOZAMBIQUE
REF: A. 08 MAPUTO 1228
¶B. 08 MAPUTO 1098
Classified By: Charge d'Affaires Todd C.Chapman, Reasons 1.4(b+d)
¶1. (S/NF) Summary: Large-scale narcotics shipments pass
through Mozambique, taking advantage of a vast and lightly
guarded coastline. Money laundering may be increasing.
Narcotraffickers in the country have connections to South
Asia, and some appear to have links to the ruling Frelimo
party and the GRM. Using Department of State INL funds, the
Embassy has led a successful border security program with the
Portuguese Embassy that has resulted in the seizure of
narcotics. The mission has also provided support via DoD and
Treasury, and directed counternarcotic assessments by the
Africa Command, LegAtt, and DEA. While not a
thoroughly-corrupted narco-state, the trends in Mozambique
suggest cause for concern unless the GRM takes quick action
to address these growing problems. End Summary.
-------------------------------
Large Scale Narcotics Shipments
-------------------------------
¶2. (S/NF) In a series of investigative reports late last
year, Mozambique newsweekly Zambeze claimed Mozambique was
considered by some estimates to be the second largest drug
transit country in Africa after Guinea-Bissau. XXXXXXXXXXXX
Recent incidents suggest that larger amounts of
narcotics are indeed passing through the country, taking
advantage of a coastline twice the length of California's
with minimal control. Long-time commentator on Mozambique
Joseph Hanlon publicly declared in May that the value of
illicit drugs passing through the country probably surpasses
combined legal external trade. In mid-May, police seized $5
million in heroin at the Ressano Garcia-Lebombo border with
South Africa. In mid-June, police destroyed 7,000 liters of
precursor chemicals discovered at the port of Maputo from
China en route to South Africa; the United Nations Office of
Drug Control indicates that this port is heavily used to
import chemicals used for meth production. XXXXXXXXXXXX
have described to P/E chief how
Pakistani-owned trucking companies based in Sofala province
over-declare imports at the Beira port as one way to hide the
quantities of drugs coming into the country. Early on June
20, police discovered about one ton of hashish at Chongouene
beach in Gaza province after receiving calls from local
fishermen about suspicious vehicle movements in the area.
-------------------------------------
Signs of Money Laundering Proliferate
-------------------------------------
¶3. (S/NF) A source inside the Frelimo party recently told
the Embassy that Mozambique, with ten banks and thirty
legally-registered exchange houses, has significantly more
financial institutions than the market in such an
impoverished country should be able to support with
legitimate business. He also observed that 1500 construction
projects are currently underway in Maputo--most financed with
cash and mostly in real estate, and noted that it was unusual
that housing prices in Maputo are increasing in spite of the
world financial crisis. Separately, Hanlon indicates that
the rapid growth in Mozambique's stock market is suspect, as
the value of stocks listed on the exchange is predicted to
reach $100 million within two years of opening. Finally, lax
regulation of casinos has raised concern by local radio and
TV commentators about that sector's role in money laundering.
---------------------------
Criminal Ties to South Asia
---------------------------
¶4. (S/NF) A USAID report issued in 2006 notes that commerce
in Maputo depends on the financial acumen of a small number
of Muslims of South Asian-descent who contribute generously
to the FRELIMO party. A major contributor to former
President Chissano and President Guebuza from this community,
who resides less than a hundred meters from the Presidential
Compound, Mohamed Bashir Suleman (MBS), is the owner of the
MAPUTO 00000713 002 OF 003
commercial MBS Group. Contacts at all levels have advised
Emboffs that MBS is a known large-scale narco-trafficker.
They indicate that MBS uses his FRELIMO party connections, as
well as his shopping mall, supermarkets, and hotels to import
narcotics and launder money without official scrutiny. Other
South Asian businessmen with ties to FRELIMO also operate a
vast network of loosely-regulated money changing houses,
which reportedly maintain financial ties with more radical
organizations in
Pakistan and elsewhere.
¶5. (S/NF) A business contact recently shared with P/E chief
a copy of a letter from Mozambique's Chamber of Business
Associations (CTA) to the Prime Minister, expressing concern
about one company selling imported vegetable oils at prices
clearly below cost, noting that this type of price dumping
could result in the withdrawal from the market of other
companies and ultimately a monopoly to form. The contact
said that the letter was in response to efforts by the MBS
Group to consolidate control of this sector--but in reality
the message had nothing to do with vegetable oil--rather, it
was a veiled warning from the
business community to the government that MBS Group's use of
vegetable oil to cover the import of illicit drugs was so
brazen that it was no longer tolerable.
------------------------------------
Narcotrafficking Connections in GRM?
------------------------------------
¶6. (S/NF) The Frelimo source also told the Charge that MBS
Group regularly uses phantom imports to launder money, and
indicated that MBS and another immigrant, Ahmed Gassan (owner
of the Home Center Furniture store) collude with the GRM's
head of customs (who he called "the King of Corruption")
to reduce scrutiny on imports. The source also indicated
that Gassan's business interests are personally protected by
Minister of Planning and Development Aiuba Cuereneia.
--------------------------------------------- ----------
USG Border Security, OTA, DoD Support, Other Assessments
--------------------------------------------- ----------
¶7. (C) Using Department of State INL bureau funds, the
Embassy has a highly-successful joint project with the
Embassy of Portugal to provide training for GRM border
guards. With a very small investment of less than $200,000,
this program has led to the seizure of $2.5 million in cash
and the arrest of two Pakistani smugglers (ref B). While the
program was denied funding in FY09, it may receive support
again in FY10. Mozambique's Tax Authority (AT) has garnered
a reputation for honesty and transparency, and the AT's
director has publicly criticized the head of Customs about
smuggling concerns. Via the Department of Treasury's Office
of Technical Assistance, the USG is providing training and
capacity building to the AT, and is reviewing ways to
specifically support the AT's Financial Intelligence Unit.
DoD provided maritime training, small boats , and coastal
monitoring systems to the FADM and more of this type of
support is programmed for the future. Finally, at the
request of the Embassy, Africa Command, DEA, Treasury and
LegAtt representatives visited Maputo in early June to
conduct a joint assessment of the drug trafficking problem
and the GRM's capabilities. Initial findings validated the
pervasiveness of the problem and identified the institutional
weakness and level of corruption of Mozambican law
enforcement agencies as core problems inhibiting a coherent
government response.
¶8. (SBU) At the most recent mini-Dublin meeting chaired in
late-May by the Portuguese Embassy, representatives from the
Dutch, British and German embassies specifically pointed out
weaknesses in the GRM's enforcement activities, highlighting
that concerns are widespread in the international community.
These concerns were quickly borne out, as in a presentation
at the meeting, a representative of the GRM's Inter-agency
Working Group on Narcotrafficking focused entirely on
domestic consumption and addressing the health needs of local
drug addicts.
--------------------------------------------- -----------
Comment: Not Thoroughly-Corrupted, but Cause for Concern
MAPUTO 00000713 003 OF 003
--------------------------------------------- -----------
¶9. (S/NF) Mozambique most certainly is not yet a
thoroughly-corrupted narco-state. However, it is becoming
increasingly clear that the magnitude of the drug shipments
passing through Mozambique may be on a much larger scale than
previously understood, taking advantage of the country's long
and unprotected coast and the facility with which port and
customs officials can be bribed. Money laundering, related
government corruption (possibly even official support), and
ties to South Asia mean that the problem has the potential to
get much worse. While the mission has made initial steps to
bring USG resources to bear, the road ahead will require a
comprehensive and coordinated effort by the international
community to staunch the flow of drugs, not to mention
strengthen the political will of the GRM to take concrete
action.
CHAPMAN