Congo’s Banking System Complicit in Kleptocracy, Report Says
A new report by The Sentry, a nonprofit investigative group, has shed light on the role of banks in facilitating illicit financial flows that perpetuate violent kleptocracies like that of Democratic Republic of Congo (DRC) President Joseph Kabila.
The Web of Corruption
According to the report, Kabila’s government and his allies have used the banking system to launder billions of dollars, effectively crippling the country’s economic growth and social progress. The report highlights the case of BGFIBank DRC, a bank run by Kabila’s brother, which has processed transactions for companies linked to Lebanese businessman Kassim Tajideen, an individual under US sanctions for his financing of Hezbollah.
The Channels of Illicit Funds
The investigation found that despite multiple warnings from bank employees about non-compliance with US sanctions, the movement of illicit funds continued. While Tajideen was arrested in 2017, the channels he used to move money remain unscrutinized, and the ties between Tajideen’s finances and the Kabila government are part of a wider problem that allows for a system of organized theft.
The International Response
The report argues that banks play a crucial role in enabling corrupt governments and terrorist financiers to operate by providing them with access to the global financial system. It recommends that the international community, particularly the US and European countries, take concrete steps to address this issue through:
- Sanctions
- Anti-money laundering measures
- Enhanced regulatory oversight
The Call for Action
“By pushing anti-money laundering measures, you force the banks to care,” said John Prendergast, co-founder of The Sentry and founding director of the Enough Project. “They just need to be pushed a bit by regulators.”
The report suggests that a more effective approach to sanctions in Africa would involve applying the most appropriate measure on the target regime and following up to identify other affiliates and companies under a particular individual’s control.
“We think that this merits a whole heck of a lot more scrutiny by law enforcement and government,” said J.R. Mailey, director of investigations for The Sentry.
The Need for International Coordination
The investigation highlights the need for greater international coordination and cooperation in addressing the issue of illicit financial flows and kleptocracy. As Dranginis noted, “This has to be a broad effort coordinated between actors.”