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By Ciaran Ryan

Moneyweb: Journalist & Host of Moneyweb Crypto Podcast


Shining a light on Zimbabwe’s $4.5bn-a-year gold smuggling racket

There are fears Zim could be put back on the Financial Action Task Force’s grey list, after Al Jazeera documentary.


Al Jazeera’s explosive documentary on gold smuggling in Zimbabwe lends credence to the long-held view in Harare and abroad that there are powerful forces profiting from sanctions and that an illegal gold smuggling racket reckoned to be worth more than $370 million (R6.8 billion) a month operates relatively freely in the country.

The documentary has been the subject of non-stop discussion in Zimbabwe since it aired.

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“My big fear is that we could end up back on the Financial Action Task Force [FATF] grey list, after we were removed a year ago,” says Eddie Cross, former opposition parliamentarian and Harare-based businessman.

“Just think of the implications [of gold smuggling] for terrorism.”

Ironically, South Africa was placed on the FATF grey list earlier this year for failing to act speedily enough to prevent money laundering and terrorist financing, nearly a year after Zimbabwe was removed from the list.

The Al Jazeera documentary shows how easily terrorism financing could be accomplished through the smuggling of gold.

The Reserve Bank of Zimbabwe (RBZ) took umbrage at Al Jazeera’s suggestion that the bank was “Southern Africa’s laundromat” for an alleged African gold mafia involved in illicit gold dealings, corruption and money laundering.

ALSO READ: The shady interests that want to maintain sanctions on Zimbabwe

“It is particularly strange that the reports claim that ‘through the bank, Government is using illicit ways as a scheme to bust international sanctions placed on political leaders and government entities’,” says RBZ in a statement, pointing out that it was not a sanctioned entity (by the US Office for Foreign Assets Control).

“There are no sanctions on Zimbabwean exports and imports, including trade in gold, to warrant Zimbabwe to ‘circumvent international sanctions’ through illicit trade in gold.”

Perspective

Cross takes issue with Al Jazeera’s claim that the gold smuggling is netting criminals $2 billion a year.

“It’s much larger than that,” he says. “Zimbabwe sells about 100 tons of gold a year, 70% of which is smuggled and the remaining 30% is sold through official channels. That puts the smuggling operations at about $4.5 billion a year.”

Part of this gold is mined in countries to the north, notably Democratic Republic of Congo (DRC), Rwanda, Uganda and Tanzania, and then smuggled into Zimbabwe by truckers.

Then there are the roughly 500 000 artisanal miners with an estimated daily haul of about 1 gram of gold. That tallies up to about 60 tons a year, and virtually all of this is likely smuggled rather than sold through official channels.

A further roughly 30 tons a year is mined by formal sector mines such as RioZim, which operates the Renco and CAM & Motor gold mines, and Metallon.

In and out of SA

There have long been suspicions that Zimbabwe’s gold mafia has deep tentacles into SA.

Smugglers were known to sell gold to local refineries as ‘smelted jewellery” and then claim value-added tax back on the sales.

Cross, who has investigated the southern African gold industry, says gold smugglers entering SA are seldom apprehended at the borders or airports, because of an elaborate system of corruption which allows them relatively free passage into and out of the country.

“Quite apart from the gold mafia, there is a financial mafia selling gold for rands, and then selling the rands to Zimbabweans, where it is used to buy gold and export to Dubai,” he says.

“This is unbelievably profitable. As an example, right now there are no shortages in the stores in Zimbabwe, and the banks are sitting on $2.5 billion in deposits.”

Invisible barter system

Effectively, a system of barter or Hawala has evolved, allowing smugglers to swap currencies and gold without any funds leaving the country, and without detection by the banks.

The Al Jazeera documentary shows Ewan MacMillan, a trader and convicted gold smuggler who has reportedly fled Zimbabwe over the past week, claiming he can launder dirty money through a gold-for-cash scheme.

In 2003, MacMillan was charged with smuggling about $68 million (then worth R436 million) of gold to SA as part of an organised crime syndicate. He makes no attempt to hide his criminal past in the documentary.

MacMillan’s Dubai-based partner, Alistair Mathias, claims on camera to export one ton or $40 million a month out of Ghana as part of a $70 million to 80 million-a-month smuggling operation, which includes SA.

MacMillan and another alleged smuggler, Kamlesh Pattni, claim to buy the gold on behalf of the Reserve Bank of Zimbabwe – something denied by the bank. The gold is reportedly delivered to a company owned by the RBZ, Fidelity Printers and Refiners. Fidelity’s’ main business is gold refining.

ALSO READ: US government sued in Gauteng High Court over Zimbabwe sanctions

Most of the gold leaving Zimbabwe is allegedly purchased from artisanal miners and shipped to Dubai, with the proceeds in US dollars repatriated to Zimbabwe.

It appears relatively easy for criminals to piggyback on this scheme, by setting up companies and opening bank accounts in Dubai.

They hand over dirty cash to the smugglers, who bring it to Zimbabwe, where it is declared as properly authorised proceeds from gold sales.

The proceeds of gold exports are declared twice, reflected as legitimate sales in both Zimbabwe and Dubai.

‘Angel’

The investigation exposed Zimbabwe President Emmerson Mnangagwa’s ambassador-at-large, Uebert Mudzanire (aka Uebert Angel), who moonlights as a pastor and predictor of election results and football scores, and who claims to be able to move goods in diplomatic bags.

Mnangagwa’s niece Henrietta Rushwaya, president of the Zimbabwe Miners Federation, is apparently also implicated in the scandal.


On camera, Angel appears to call her on the phone, but in response to the documentary says he already suspected the motives of the Al Jazeera journalists (pretending to be criminals) and “played along with them” after they insisted on meeting Mnangagwa.

Angel instead connected them to a decoy posing as Rushwaya (who was arrested in October 2020 and later acquitted for allegedly trying to bribe airport authorities to enable her to smuggle gold outside the country).

Reaction

“We have world-class deposits of gold, but we have nothing to show for it,” former finance minister Tendai Biti is reported to say on camera.

Zimbabwe’s opposition leaders, including several from the ruling Zanu-PF, were quick to respond.

Citizens Coalition for Change (CCC) leader Nelson Chamisa tweeted: “The fish rots from the head. The Aljazeera (sic) documentary exposes the extent of the rot at the top, but it’s just the tip of the iceberg. This clearly shows how corrupt, rotten and broken leadership has destroyed a jewel and great country. Zimbabwe is not poor, it’s just poorly governed.”

“The Al Jazeera documentary confirms the abuse of diplomatic immunity and the role of politically exposed persons and cartels in money laundering and gold smuggling in Zimbabwe. It’s typical abuse of office for private gain,” says Transparency International Zimbabwe.

Zimbabwean investigative journalist Hopewell Chin’ono said Zimbabweans are not asking for much.

“They are asking for health services that work, public transport services that work, surfaced roads, basic stuff. Those that are stealing $165 million a month are stealing 165km of road every month, or 1 980km a year,” he said on a podcast in response to the documentary.

Asked for comment, a senior Zanu-PF representative replied: “Many members of Zanu-PF are shocked at the allegations of criminal conduct by Uebert Angel, Ewan Mac Millan, and others, in the Al Jazeera Gold documentary.

“Zimbabwe desires to be a modern middle-income economy based on the rule of law. These allegations do not do us any favours. It is a matter deserving of a thorough investigation by Zimbabwean authorities.”

Tobacco baron

Also named in the documentary is Simon Rudland, CEO of Gold Leaf Tobacco.

Gold carriers allegedly working for Rudland are shown by Al Jazeera to avoid baggage checks at Harare airport, and once in Dubai, hand over the gold on the other side, returning to Zimbabwe on the next flight with US dollars. One courier reportedly made 13 trips to Dubai in two months.

Rudland is one of Africa’s wealthiest businessmen. His family was recently involved in the failed attempt to buy Tongaat Hulett.

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He was the target of a failed assassination attempt in Johannesburg in 2019 when his car pulled into an office building for a tobacco association meeting.

Last year, the South African Revenue Service (Sars) won a preservation order against Rudland and Gold Leaf Tobacco, intended to prevent any possible dissipation of assets intended to frustrate the collection of taxes.

Rudland told Moneyweb at the time that Gold Leaf “maintains its innocence and shall continue its operations with complete transparency with the revenue authority, as it has always done. We will continue to make our excise and Vat contributions, amounting to over R2 billion per annum.”

Since the assassination attempt, Rudland is said to visit SA less frequently, concentrating most of his time in Zimbabwe, where his family has reportedly acquired interests in several prominent Zimbabwean businesses, including Bitumen World.

Rudland told Al Jazeera that the allegations against him were false and form part of a smear campaign against him by an unidentified third party.

He described himself as “a strong businessman … competing against the greedy and the envious.”

Moneyweb approached Rudland to comment on the documentary. He replied: “I deny all allegations made against me concerning gold smuggling, money laundering or collusion with any government.

“The allegations are false and are made without any proof and the documentary is extremely sensational, this propoganda [sic] is injurious to my good name,” said Rudland.

“I urge Al Jazeera to retract their statements and issue a public apology. Notwithstanding this, I will in any event be instituting legal action against the media house for severe reputational harm caused.”

Fidelity Printers and Refiners denied having any business relationship with Rudland and giving gold exporting licences or incentives to those identified, Al Jazeera is quoted as saying.

Fidelity also denied any involvement in money laundering, smuggling or sanctions busting.

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This article originally appeared on Moneyweb and was republished with permission.
Read the original article here.

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