TBML, bribery and tax evasion red flags revealed in Afreximbank deal

An investigation into a US$30 million loan to South Sudanese oil marketing company, Trinity Energy, claims to have revealed red flags concerning trade-based money laundering (TBML), bribery and tax evasion.

The loan from the African Export-Import Bank (Afreximbank) was backed by senior government officials and enabled powerful individuals to benefit from the manipulation of business worth hundreds of millions of dollars, according a report by the investigative and policy organisation, The Sentry.

Trade finance facility

In April 2018, Trinity agreed a trade finance facility with Afreximbank for a series of US$30 million loans to purchase diesel and gasoline to sell to the South Sudan market. As part of the deal, the government of South Sudan committed to award cargoes of crude oil to Trinity.

The arrangement gave the company that had never before traded crude, privileged access to the market for South Sudan’s oil, the country’s most valuable resource and the source of the vast majority of its national wealth.

Preferential treatment

Trinity was awarded more than 40 per cent of crude cargoes contracted by the government from June 2018 to May 2019 and given a dominant role in the market for petroleum and diesel imports, a position that facilitated its secretive provision of fuel to the South Sudanese army according to the investigation.

 It found that Trinity spent millions of dollars on “facilitation” and “business acquisition” costs for the Afreximbank deal, including 18.7 million South Sudanese pounds (US$125,000) in payments to the government committee responsible for approving the deal.

Black market and fake invoices

During the implementation of the trade finance deal, Trinity changed millions of US dollars on the black market, according to The Sentry.

Trinity also paid fake invoices overseas to disguise the black market exchange of hundreds of thousands of dollars, and engaged in behaviours indicative of tax fraud the investigators concluded.

More information on the Sentry’s report, Crude Dealings, How Oil-Backed Loans Raise Red Flags for Illegal Activity in South Sudan, can be found here, from where the report can also be downloaded.


Categories: Trade Based Financial crimes News

%d bloggers like this: