By Jean-Pierre Afadhali
North Korean businessmen linked to Pyongyang government have been awarded contracts in DR Congo’s government projects and accessed banking services consequently violating international sanctions imposed by European Union, United Nations and USA on North Korea, The Sentry, an anti-corruption NGO revealed in a report.
Findings from the report titled “Artful Dodgers” released on Monday by the organization founded by American actor and activist George Clooney show that the North Korean Businessmen evaded international sanctions to undertake lucrative cities’ design in the DR Congo, raising concerns on transparency in the central African country and international banking system.
The report suggests that the firm Congo Aconde founded by North Korean Businessmen and linked to Pyongyang’s government under international sanctions had access to US dollars through a local bank while undertaking projects in at least three provinces. According to the findings from the study that built on last year’s investigations “the pair [ North Korean entrepreneurs] had closer connections to Pyongyang than first thought. In addition, the two men likely worked in the DRC on behalf of a little-known North Korean government design firm, Korea Paekho Trading Corporation.”
The Sentry alleges that these revelations on DR Congo operations and other information show that the affiliates of Korea Paekho Trading Corporation have operated throughout West and Central Africa signaling that the enforcement of sanctions against North Korea remains problematic.
“In particular, they demonstrate how North Korean actors exploit weak institutional controls and jurisdictions with high levels of corruption, a model other sanctions busters have followed. In the case of the DRC, due diligence shortfalls across private and public institutions may create systemic risk for an economy that relies heavily on access to US dollars through relationships with international banks.” Read the alert on alleged sanction’s violation.
According to the Sentry, the construction firm Congo Aconde run by two North Korean nationals undertook previously unreported projects in the southern city of Kolwezi, the capital of Lualaba province, adding those activities in the area coupled with any local official engagement with the company is a violation of sanctions implemented in 2016 by the European Union, the United and the US.
Contacted by Radio France International, for a comment on sanctions’ violation accusations the governor of Loualaba province did not respond.
The Sentry noted that the province of Kolwezi had dedicated $ 102,000 in 2018 to rehabilitate roundabouts, roadsides and green spaces. “This list of projects in the budget document matches works undertaken by Congo Aconde there during the same period.” Said the American NGO in the report.
Meanwhile, the alert released by the anti-corruption NGO states that the records it reviewed indicate that Congo Aconde also had a previously unidentified US-dollar account at the DRC affiliate of Cameroon-headquartered Afriland First Bank, which was tied specifically to its Kolwezi operations. The Sentry previously identified another US dollar account held by the company at the same bank.
The report concludes North Korean and any companies they control are mostly prohibited by EU and UN sanctions from accessing banking services, and US sanctions strictly limit any access to US dollars. However, the report authors say that the company appears to have cultivated relationships with DR Congo’s city and provincial government executives, even if its expertise may have played a determining role in securing contracts. “Congo Aconde’s apparent relationships with powerful individuals, the opacity surrounding the tenders, and the sanctions risks raise concerns about possible corruption.”
The report concludes that actions by governments, multilateral institutions, and banks regarding sanctions risks in the DRC could help improve enforcement and reinforce the integrity of the country’s banking sector.
The Sentry recommends that “the US Department of State and the IMF should urge the DRC to ensure a transparent public tender process and to make all government contracts, including provincial contracts, publicly available.”
Global multinational banks should carry out enhanced due diligence on the transactions of certain banks operating in the DRC. Banks operating in the DRC should improve screening, training, and awareness of these offenses and add proliferation financing red flags to their filters, recommends investigators.