n this issue
+ $33mn ransoms
+ Money laundering: $802mn
+ Cocaine seizures and meths factory
+ Health workers and judges to strike
+ Comment: everything is for sale
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$33mn ransoms paid to free kidnap victims;
185 kidnappings in 13 years with 2 more kidnappings last week
Traced ransoms paid as laundered money transferred by family members of the kidnap victims to foreign accounts in the last decade exceed $33mn, reported the Mozambican Financial Intelligence Office (GIFiM), a specialist unit in the Ministry of Economy and Finance, last Thursday (25 July). (AIM, Lusa 25, 26 July) Gossip in the business community suggests substantially more has been paid which has not been traced.
Payments are made through the banking system disguised as legitimate transactions. The criminals “resorted to front or fictitious companies and some legitimately incorporated companies, potentially with the involvement of professionals such as lawyers and bank officials”, says GIFiM. It adds that there is evidence to suggest the involvement of members of the Mozambican defence and security forces and magistrates. Interior Minister Pascoal Ronda said in March that since 2011 the police have recorded 185 kidnappings – more than one per month for 13 years.
A majority of those kidnapped have been businesspeople of Pakistani origin or family members. More than 100 businesspeople have left the country and many of their businesses have closed, Pedro Baltazar, head of the Security Department at the Mozambican Confederation of Business Associations (CTA), told reporters on Thursday (25 July) in Maputo.
There have been two recent kidnappings in Maputo. At 14.30 on Saturday (20 July), the son of the owner of the shop “Luxo e Brinde” on Eduardo Mondlane Avenue, was surprised as he was leaving a nearby shop and taken by four armed kidnappers There was a police brigade nearby and a shootout, with one policeman killed. The police say they found the getaway vehicle abandoned in Matola, riddled with bullet holes.
Then on Monday evening (22 July) three armed men dragged the owner from inside his Maputo bottle shop and kidnapped him. Neither has yet been found.
The owner of a stationery shop on Ho Chi Minh Avenue in central Maputo who was kidnapped on 26 June managed to open a window of the room where he was being held and escape. Police showed the property where he was held to journalists on Tuesday (23 July) and it was in Tchumene, a luxury, high security condominium next to a police station. It is on the N4 main road from Matola to South Africa.
There is increasing evidence of links between South African and Mozambican kidnapping gangs.
Money laundering: $802mn in 5 years
More than $802mn was illicitly exported from Mozambique between 2019 and 2023, Mozambique’s Central Office for the Fight against Organised and Transnational Crime (GCCCOT) reported on 12 July. Most was taken through false invoicing – money paid for goods which were never delivered.
It says 48 Mozambican and foreign individuals and 15 companies, mostly located in Maputo, Nampula and Nacala, have been charged. Of the individuals, six are in preventive detention, and 31 are considered fugitives. They are charged with money laundering, tax fraud, forging documents, and criminal conspiracy. GCCCOT has seized 54 buildings (including hotels, shops, company premises, and residences) and 13 vehicles.
Autopac, the company with exclusive rights to pack and distribute sugar in Mozambique, is among the 15 companies. Its owner, Ismael Hagi Noor Mahomed and another three of his companies are also on the list, and company accounts have been frozen. Savana (19 July) claims Mahomed and his family fled to Dubai. Nacala business tycoon Gulam Hassan is understood to have been arrested.
Several suspects arrested in Nacala were hooded and flown south to Maputo. In Nacala, “the justice system, including the Attorney-General’s Office, is riddled with corruption, and prosecutors certainly thought that there would be less chance of the suspects being freed by a corrupt judge or police officer in Maputo,” commented Zitamar (4 June)
The Attorney General’s office has briefed that $750,000 in bribes was offered to stop the arrest of one ringleader.
In a separate case, $845,000 was seized from seven suspects. Four were released on bail, and three are still in preventive detention.
The insurance industry regulatory body, the Insurance Supervisory Institute, has fined Mozambique’s largest insurance company, the publicly owned EMOSE, $156,000 for failing to make money laundering risk assessments, failing to identify “politically exposed individuals” involved in the suspect businesses or transactions, and for accepting an invalid life insurance policy as collateral. (AIM 15, 19, 22 July, Savana 19 July, Zitamar 4 June)
Money laundering has become a major global issue, and is the one area where the normally docile donor and lender community is applying pressure. Mozambique needs to move so that the intergovernmental Financial Action Task Force (FACT) takes it off its “grey list” as soon as possible.
Cocaine seizures and meths factory raid
Two recent cocaine seizures show how Brazilians traders are hiding the drug in consumer products. Two Mozambicans were detained on 19 June in possession of 446 boxes of roll-on deodorants containing 91kgof cocaine. On 27 June 120 boxes of sweets which had arrived by air were seized, each sweet normally wrapped and in plastic bags and then boxes. But each box contained mostly sweets (see photo below from the airport) but also 1.4kg of identically wrapped cocaine. The cargo arrived on 19 June and staff wondered about airfreighting cheap sweets, and contacted the police.
Cocaine seizures have increased since the 13 April 2020 arrest of Gilberto “Fuminho” Aparecido dos Santos, believed to be the leader of the First Capital Command (PCC), formed in Sao Paulo prisons in the 1990s, the PCC is considered Brazil’s most powerful criminal gang. Fuminho escaped prison in 1999, and became a major controller of cocaine for PCC. He has been living in the luxury Indy Village hotel in Maputo for several years. His presence must have been agreed at the top of Frelimo, which would have accepted that one man controlling the cocaine traffic. And he was whisked out of Maputo by the Brazilian police on 19 April soon after arrest, so there was no public discussion about how such a notorious criminal had been able to live openly in Maputo. Clearly he had been protected.
An important raid was of a meths factory being run as a vegetable farm in Vundiça locality, Moamba district, 60km north of Maputo. A Mozambican woman was arrested on 2 May for facilitating the entry of a Mexican and three Nigerians, who operated the factory and have not been found.
Methamphetamine (known as meths) is made from Ephedrine which comes from the ephedra herb which grows in high, dry places. Ephedrine in its natural form, known as mahuang, has been used in traditional Chinese medicine for two millenia, as a treatment for asthma, bronchitis and nasal congestion. During World War II, both sides used the drug to keep troops awake. After the war, recreational meths use increased dramatically. Until the 1990s ephedrine-based cold remedies were widely available over the counter in the US, and these were used by chemists to go backward to obtain ephederine and make meths. Sale of these cold remedies was restricted, to destroy the source.
Ephedra grows wild in Afghanistan, and local people found it easier to make to make meths than heroin, and there was a market. Shipments passing through Mozambique are now half heroin and half organic meths.
But meths can be produced synthetically using a related synthetic chemical P2P (Phenyl-2-propanone). A chain has been opened to send P2P from China to Mexico to Nigeria to Mozambique and South Africa, where synthetic meths are now produced in local laboratories.
But as with many things, the organic version is better. The synthetic P2P version is slightly different structurally, and more dangerous. Users can apparently tell the difference and so the is a demand for organic meths. (See Hazelden Betty Ford Foundation, “P2P Meth: The Newest Product of the Meth Epidemic, and How We Got Here”, 8 Dec 2021 https://www.hazeldenbettyford.org/articles/p2p-meth and Sam Quinones, ‘I don’t know that i would even call it meth anymore’, The Atlantic Nov 2021. https://www.theatlantic.com/magazine/archive/2021/11/the-new-meth/620174/)
Health workers and judges to strike
Health workers, including doctors, say they will strike tomorrow, Monday 29 July. Judges say they will strike on 9 August. Both are demanding more money, to compensate for special payments not incorporated in the new unified salary scale (TSU). The IMF has put a cash cap on state salaries, of $3.0bn next year, falling to $2.9bn in 2027. The doctors and judges know that their extra money must come from cutting other workers’ wages, or hiring fewer new people at a time when school are short of 16,000 teachers. Departing IMF resident representative Alexis Cirkel has not had an easy time imposing austerity on Mozambique. Perhaps an incipient class war is his departing gift.
Comment:
The new free market means everything is for sale
Thirty years ago the IMF imposed shock therapy, neoliberalism, and the free market on Mozambique. Policies have not changed, and the IMF programme agreed last month was the same. This has three intended effects: First, it forces nurses and teachers to charge informal fees in order to earn enough to feed their children. Police set up check points to collect fees. It is informal privatisation. Second, it pushes civil servants to leave government service and create private services, initially for the middle class – private health, schools, and security companies. Of course the higher-up people take a cut of the fees, which creates a wealthy and politically powerful group at the top – the oligarchs – who serve foreign interests, which guarantees total donor and lender support for Frelimo.
For more than two decades, the Ministry of Interior has controlled the sale of stolen South Africa cars in Mozambique. The Presidencia has controlled the heroin trade. Frelimo has controlled education. All with the knowledge and a blind eye turned by donors and lenders.
President Filipe Nyusi, now reaching the end of his 10-year presidency, is beginning to claim some things are outside his control. Speaking on 17 July at a meeting of the Coordinating Council of the Ministry of the Interior, Nyusi appeared irritated that no kidnap organiser has been arrested and presented to the public. “Bring us at least one of those who is ordering the kidnappings!”. And he has made similar comments about the drug trade.
He must know that both are controlled by the government. Kidnappings mostly occur in daylight near police stations or patrols. It is widely assumed that money is paid to the relevant police and senior officials. A few low level people are caught, but the organisers are protected. And the killing of a policeman in a recent kidnap may have been a warning to them not to shoot.
Nyusi had complained two days earlier about the failure to control the huge drugs transit traffic. For more than two decades the heroin trade as been controlled by the office of the President. Former President Armando Guebuza made public appearances with MBS (Momade Bachir Sulemane), labelled at “drug baron” by the US. But the trade is now more fragmented. Heroin and organic methamphetamine (made from the local ephedra shrubs) from Afghanistan is still controlled by the Mozambique President’s office, and these are rarely seized by police. But the factory in Moamba raided recently had Mexicans and Nigerians producing synthetic or P2P methamphetamine, and thus was outside the control by the President’s office.
So cocaine and labs to produce synthetic meths, not controlled by the President’s office, are seized by police, but not heroin and organic meths, nor a Brazilian drug lord living opening in the Indy Village hotel. In general, only small people are arrested.
Drugs and kidnapping are the most public versions of the new free market. But there are others. The court system is particularly sympathetic to Frelimo but the party is expected to provide high salaries and benefits. Thus the judges strike is a specific challenge to the top Frelimo leadership, saying “No matter what the IMF says, find us more money”.
Nyusi did try a decade ago to clean up, but he failed. In 2015 he named two highly respected people as ministers, Jorge Ferrao in Education and Pedro Couto in Mineral Resources and Energy. Both lasted less than two years. Ferrao tried to stop corruption in textbook buying and also tried to step teachers and school heads from spending so much time working for Frelimo. He was replaced by Conceita Sortane, a Frelimo member of parliament and head of a Frelimo provincial election brigade. In Education rewards from Frelimo are indirect. Promotions, for example to be a school head, require being active in Frelimo. Leticia Klemens replaced Couto as minister of the key Mineral Resources and Energy ministry. She had no relevant experience but had business links with the families of senior Frelimo people, including all three former presidents, and some with mining interests. She lasted one year as Minister. jh