Oil and embezzlement: Public Eye reveals Gunvor's secrets in Congo
Lausanne/Zurich, 12 September 2017
In order to reign supreme in Congo and secure, between 2010 and 2012, oil shipments worth USD 2.2 billion, Gunvor decided to make the most out of the ties between co-founder Gennady Timchenko and Russian president Vladimir Putin, interceding with Moscow so that economic cooperation agreements would be signed with Congo-Brazzaville. The firm has, however, always denied its success was due to its dealings with the Kremlin. The dealer also granted USD 750 million in loans to the Congolese National Oil Company (SNPC) for future oil deliveries, thus becoming the de-facto “bank of Congo”.
Gunvor also enlisted the services of two “door openers”, who were in turn generously compensated. In total, USD 31.9 million were paid in commissions alone. One of the intermediaries transferred several millions to Hong Kong from one of his Swiss accounts, to companies belonging to eleven Chinese nationals, several of whom were suspected of being involved in organised crime or having been convicted of financial crimes. Are these payments ultimately bribes to Congolese public officials? Two key figures, dismissed by Gunvor, confirmed that this was the intention. One of them did so before the Federal Prosecutor in the spring of 2017; the other is seen in the damning footage whose content was revealed by Public Eye. The Gunvor former executive, who was filmed without his knowledge, went as far as offering to set up a new scheme to pay bribes via Russia, specifically to avoid further trouble with the Swiss justice system.
Gunvor, who was informed of the publication of the report by Public Eye, announced yesterday to Reuters news agency that it was now being prosecuted for attribution of a felony or misdemeanor as a result of "inadequate organization", the only charge under the Swiss Criminal Code to prosecute companies - not individuals - for criminal offenses. Gunvor prefers to reveal itself the suspicions the justices have, which would anyway sooner or later be made public. Admitting to having dismissed a second employee, the one in the video, the trader continues to deny responsibility, claiming the "undesirable behaviour of individuals" as the source of the problem.
Endemic corruption is rife in the Republic of Congo yet it has never held back Gunvor's lucrative ambitions, which earned an estimated profit of USD 114 million through its activities in the central African nation. Our investigation shows that dubious practices are part and parcel of the business model of one of the leading Swiss traders. Switzerland, the world's leading nation in terms of trading, is not bound by any specific legal obligation in this sector. Although insufficient to deal with such risks, introducing transparency in payments made between traders and producing countries would limit the opacity of these transactions. In late 2016, however, the Federal Council refrained from introducing such a measure in its draft revision of the country’s Corporate Law. Whether an accomplice or simply turning a blind eye, the federal authorities continue to rely on the good will of the firms, which are called upon to "conduct themselves responsibly, and with integrity”.
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