Cashing in on the UN Sanctions Regime

The Perspective
Atlanta, Georgia

Posted April 23, 2002

Contrary to the repeated claims and accusations that the UN imposed sanctions against Liberia, including the travel ban and arms embargo, were hurting the people, the truth is the sanctions regime is helping the government to save money.

According to the United Nations Panel of Experts' latest report on Liberia (obtained by this paper), which has been submitted to the UN Security Council, the travel ban alone saves the regime some $400,000 a month on nonessential travel expenses. This is in comparison to 1999 figures released by the Taylor regime. Based on this statistic, the Liberian government is saving $4.8 million a year, money it could use for other essential services, such as paying civil servants or improve health services.

“Indeed the travel ban may have contributed to some significant savings. International travel consumed around $600,000 of government funds per month [$7.2 million dollars per year] in 1999. Following the Security Council travel ban many of these funds went unspent. Travel restrictions were extended to others not banned, further reducing expenditures. A circular reminding officials to respect the travel ban was circulated in November 2001 following the issuance of the report of the Panel of Experts (S/2001/1015) documenting violations. According to the Ministry of Finance these funds were first spent on fuel imports and more recently on helping to pay arrears of civil servants’ salaries. This may have reduced government expenditures by about $400,000 per month, a quarter of the average bill for monthly public salaries,” wrote the Panel of Experts in its report.

However, the Taylor regime continues to mislead the population with a distorted impact of the sanctions. This effort to keep the citizens ignorant is run by the Ministry of Information. The ministry uses a two-phased campaign to whip up anti-sanctions sentiment, blaming the United States, United Kingdom and the United Nations. First, a poster and billboard campaign in April and May 2001 was followed by demonstrations and critical reports in the press.

According to the Panel of Experts' report, the campaign is in its second phase, with 1000 new posters distributed around Monrovia to be posted in government buildings claiming "arms embargo killing our people" and "sanctions: killing our economy".

The Liberian press is forbidden to write about violations of the sanctions regime. When The News newspaper published a feature on November 16, 2001, about violations of the travel ban, it found itself in tax trouble and was forced to cease publication for several weeks.

The recent Panel report indicates that top government officials have minimized their sanctions bursting efforts due to government's memorandum to its officials asking them to respect the sanctions. But there are some exceptions as the Panel noted:

“However, a core of senior officials or business associates continues to flout the ban with impunity. A national of the Netherlands, Gus Kouwenhoven, has even boasted to the Liberian media that he travels regularly.

“President Taylor had all passports revoked in 1997 and new ones were introduced with unfalsifiable security features. The Foreign Ministry issues passports but other ministries may issue requests. The President also has discretionary powers to order the issuing of such passports. The Liberian National Investment Commission may also issue diplomatic passports to foreign businessmen who are appointed to find interested investors abroad. Since a special clause in the Liberian Constitution prohibits anyone not of Black African descent from becoming a Liberian citizen, foreigners can obtain some sort of honorary citizenship and become bearers of a Liberian diplomatic passport. Gus Kouwenhoven, for instance, has such a passport.”

The Liberian shipping registry has become an instrument that the government uses to violate the UN sanctions. In August, 2001, this paper reported payments originating from the Bureau of Maritime Affairs account at EcoBank to San Air General Trading at the Standard Chartered Bank in Sharjah, Dubai. The sources indicated that the transactions were instructed by the Bureau of Maritime Affairs (BMA) in Monrovia and carried out by LISCR. Also in October of last year, The Perspective reported payment of about $400,000 sent from the LISCR account at the Branch Banking & Trust in Washington, DC, to San Air Standard Chartered Bank of Dubai for arms. In its current report, the Panel wrote:

“Figures provided by the Central Bank of Liberia for 2001 continue to show irregularities in figures from the Ministry of Finance and the maritime agent LISCR. IMF noted, after its Article 4 consultations in December 2001, that reported payments from the shipping registry to the Government differed from collections at the Ministry of Finance by some $2 million, possibly reflecting deductions at source by BMA or timing differences in the transfer of funds from offshore accounts.”

“The Panel tried to examine the accounts of BMA but was informed that the generator had broken down and would be repaired only after the Panel had left Liberia. The Panel remains concerned about the activities of BMA. Although in October 2001 the authorities directed that government bank accounts be moved from commercial banks to the Central Bank of Liberia, BMA continues to maintain its three-signatory accounts at Ecobank in Monrovia. Although BMA should be funded by the Ministry of Finance with 10 per cent raised from the maritime revenues, the Panel found that it did not feature in the payroll status report of the Ministry of Finance (9 March 2002) and in the Bureau of the Budget’s budget for the period from 1 July 2001 to 30 June 2002 BMA fell under the Government of Liberia Special Commitment - budgeted for L$ 48 million, more than the Senate. According to the Auditor General, his office last audited BMA in 1988.”

“The Panel did obtain figures from the Central Bank of Liberia, LISCR and the Ministry of Finance. None of the figures match, and they show significant discrepancies illustrating the urgent need for independent auditing and oversight.”

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