A Swiss NGO has brought to light confidential documentsexternal link attesting to the relationship between the Geneva-based commodities trader Trafigura and an alleged arms dealer in South Sudan.
In December 2018, the United States placed retired Israeli Defence Forces Major General Israel Ziv under sanctions over the sales of weapons and ammunition to the government and opposition in South Sudan.
“Ziv has been paid through the oil industry and has had close collaboration with a major multi-national oil firm,” the U.S. Department of Treasury noted in its decision, without naming or blacklisting the firm.
Ziv, according to the same source, had used an agricultural company that was nominally present in South Sudan to carry out agricultural and housing projects that were a cover for arms sales worth $150 million.
The Swiss NGO Public Eyeexternal link highlights documents including a letter of invitation sent on 28 August 2017 to Mr. José Larocca, head of Trafigura's oil division, by the Office of the President of the Republic of South Sudan referring to discussions between José Larocca and Israel Ziv "on various areas of investment and interest in Southern Sudan".
“Given the high-risk context and the blurred role played by some intermediaries, one may wonder how a company claiming a ‘zero tolerance policy on corruption’ could engage with South Sudan and establish trade relations there without worrying about verifying that the funds invested were not used for illegitimate or illegal purposes,” says Public Eye in its report.
A report external linkdated April 9, 2019 from the United Nations Panel of Experts on South Sudan, addressed to the President of the Security Council lays out the problematic transaction linking the government of the African nation to the Swiss oil trader.
The Organized Crime and Reporting Projectexternal link visited sites linked to the questionable Green House project and published an investigation in July documenting transactions between Trafigura, the central bank and Global, a company linked to Ziv. The Public Eye report builds on that investigation and references the findings of the UN expert panel.
Trafigura told swissinfo.ch that it has bought crude oil from the Government of South Sudan like other oil companies. All pre-payments were made into bank accounts of the country’s Central Bank.
“Trafigura sought to follow UN guidelines regarding the remittance of the crude oil prepayments and has fully cooperated with the UN Panel of Experts,” says the company.
Public Eye reveals that Trafigura filed a general commercial contract claim against South Sudan and the country's central bank on Sept. 20 in London.
The oil trader, notes the legal news website Law360, has been drawn into disputes over oil with the country in the past, and inked an export agreement with South Sudan in 2012.
In July, Trafigura announced that it would abolish the practice of using intermediariesexternal link.
Switzerland-based commodity traders Trafigura, Vitol and Glencore came under scrutiny last year for their alleged links to questionable intermediaries enmeshed in Brazil’s largest corruption scandal.