FBI Investigates European Banks for Allegedly Aiding Corruption in Mozambique

BNP Paribas, Credit Suisse and VTB are being investigated for their roles in selling about $2 billion of debt

Matt Wirz and
Rebecca Davis O’Brien in New York and
Jenny Strasburg in London
Updated Nov. 6, 2017 8:15 a.m. ET
The U.S. Justice Department and Federal Bureau of Investigation are investigating three international banks for their roles in selling about $2 billion of debt for Mozambique, opening a new phase in the global inquiry into the bond deals, people familiar with the matter said.
Swiss lender Credit Suisse Group AG, Russian bank VTB Group and French bank BNP Paribas SA are focuses of the U.S. probes, the people said. The FBI is looking into whether the banks facilitated corruption by enabling Mozambican officials to take money...
"Mozambique: What will the government look like after an FBI investigation?"

The FBI and the US Department of Justice investigate banks involved in Mozambican hidden debt. But, as a sovereign entity, the Mozambican Government is not obliged to cooperate; says economist.
According to information from the Wall Street Journal, the FBI and the US Department of Justice are investigating three banks involved in Mozambican hidden debts: Credit Suiss, VTB and BNP. But Kroll's independent audit of these debts lacks relevant information to clarify some important points. The Mozambican authorities refused to provide any information.

The US investigation has been underway for about a year. What interpretations can be made of this initiative? To respond, DW Africa interviewed the Mozambican economist Tomás Tibana:


No budget support while Kroll audit incomplete – AIM report

The traditional disbursements from the donors who used to provide Mozambique with direct budget support will not resume until the gaps in the audit of the three security-related companies Ematum, Proindicus and MAM are filled, warned the Swedish State Secretary for International Development Cooperation, Ulrika Modeer, in Maputo on Wednesday.

According to a report in Thursday’s issue of the independent newssheet “Mediafax”, after giving a lecture on “democracy, gender equality and transparency”, at Maputo’s Eduardo Mondlane University, Modeer told reporters that there would be no further budget support until the audit is completed, and those responsible for the illegal government guarantees to the three companies are held responsible for their actions.
Ematum, Proindicus and MAM borrowed over two billion US dollars from European banks (Credit Suisse and VTB of Russia) in 2013 and 2014. The loans were only possible because the Mozambican government of the time, headed by President Armando Guebuza, gave guarantees, thus violating the ceiling on guarantees set by the budget laws of 2013 and 2014, as well as a clause in the constitution stating that only the country’s parliament, the Assembly of the Republic, can authorise such debt.
The guarantees added 20 per cent to Mozambique’s foreign debt, and pushed it beyond the limits of sustainability.
Sweden financed the audit, undertaken by Kroll Associates, reputedly the world’s foremost forensic auditing company. But the Kroll audit report complained that the task could not be completed because of obstruction by the management of the three companies.
Antonio do Rosario, a senior officer of the State Security and Intelligence Service (SISE), is the chairperson of all three companies. Citing “national security” he refused to collaborate fully with the auditors, and in a message widely circulated over the Internet he boasted that he had thrown the Kroll auditors out of his office.
The main challenge in completing the audit, Kroll said “was the lack of information available from the Mozambique companies. Kroll spent a considerable amount of time requesting and liaising with representatives of the Mozambique companies to obtain information and documentation that was, in some cases, either ultimately incomplete or not provided at all”.