Angola: UN Report challenges Unita diamond millions

Angola Peace Monitor
Published by ACTSA

-----------------------

Special report
Issue no.2, Vol. VIII
22nd October 2001

-----------------------

UN report's challenge on UNITA's diamond millions

UNITA continues to fund its war in Angola through illegal diamonds sales
worth an estimated $100 million last year, according to the latest report
from the UN Monitoring Mechanism on Sanctions against UNITA, which was
delivered to the President of the UN Security Council on 12 October.

The report (www.un.org/Docs/sc/committees/Angola/966e.pdf) warns that
diamonds worth between $1 million and $1.2 million a day are being smuggled
out of Angola in contravention of UN sanctions - and that much of this
amount sustains the war of the rebel movement UNITA. It points out that,
although UNITA has lost much of its mining capacity, the rebels probably
sell between 25 and 30 percent of the illegal diamonds leaving Angola - not
including sales from its stockpile.

In July 1998 the United Nations imposed an embargo on all Angolan diamonds
which do not pass through official state channels - as guaranteed by a
certificate of origin. This embargo was put in place in an attempt to stop
UNITA gaining funds to pay for its war. The majority of smuggled Angolan
diamonds are now not associated with UNITA, but are the result of either tax
evasion or a huge strategic operation by competitors of the official
diamond-buying organisation ASCorp.

The report also highlights the fact that whilst there are stringent controls
on the legal exports of diamonds from Angola, there are currently few
controls on the export of diamonds from other countries. It is this lack of
an international certification of origin scheme that is being tackled in
Luanda at the penultimate Kimberley Process meeting in Luanda as the Angola
Peace Monitor went to press.

Despite UNITA earning around $100 million last year, the rebels are reported
to be finding it difficult to receive arms and ammunition. The report states
that "the loss of control over airstrips has made flights much more
dangerous for any carrier. The Mechanism's active monitoring of the arms
embargo has also had a deterrent effect".

In an indication that the monitoring of sanctions continues to be a thorn in
the side of UNITA, a spokesperson in Portugal, Joffre Justino, commented
that the report was "illegal and immoral, really miserable" and called for
letters of protest to the UN.

Monitoring Mechanism calls for further action

This was officially the Mechanism's "supplementary" report, having submitted
its "final" report on 21 December 2000 with an addendum on 18 April 2001. It
built on the groundbreaking work of the UN Panel of Experts which on 15
March 2000 published the findings of a major investigation, known as the
"Fowler Report" on how individuals and governments helped UNITA build up a
huge arsenal in return for illegal diamonds (see APM no.7 vol.VI).

This latest report hints at the frustration of the members of the Monitoring
Mechanism when it states that an, "important issue is the status of the
recommendations included in the report presented by the Mechanism on 21
December 2000. The consideration and further implementation of those
recommendations by the Security Council will enable the Member States to
take appropriate action to address the situation, for the better enforcement
of the sanctions".

The UN Security Council has continually deferred accepting or rejecting the
recommendations made by the Panel of Experts in March 2000 and the
Monitoring Mechanism in December 2000. Now there is the possibility that the
Monitoring Mechanism will be wound up, relieving the pressure placed on
states and institutions to implement sanctions.

Sanctions were first placed on UNITA in 1993 following its rejection of the
elections the previous year and its return to war. The first sanctions
banned the sale of arms or petroleum products to UNITA. In October 1997
further sanctions were imposed following UNITA's refusal to abide by its
obligations under the Lusaka Protocol which laid the basis for a negotiated
peace in Angola. These sanctions included the banning of foreign travel by
senior UNITA officials and the closing of UNITA offices abroad. As the
situation in Angola deteriorated further and the extent of UNITA's war
preparations became apparent, further sanctions were imposed in July 1998,
prohibiting the export of all Angolan diamonds which were not sold through
official channels with a certificate of origin issued by the Angolan
government, banning the sale of mining equipment to UNITA, and freezing its
bank accounts.

The report points out that, "in 1999 the Security Council recognised that
the imposition of sanctions alone, without the capacity to identify
violators and monitor compliance, was insufficient".

The Mechanism was given the task of collecting information and investigating
leads relating to violations of sanctions "with a view to improving the
implementation of the measures imposed against UNITA". It is composed of
five members, Ambassador Juan Larrain (Chile), Ambassador Lena Sundh
(Sweden), Christine Gordon (Britain), Ismaela Seck (Senegal), and Wilson
Kalumba (Zambia).

During the last six months the Mechanism has visited Angola, Belgium,
Botswana, Burkina Faso, Côte d'Ivoire, France, Kenya, Portugal, South
Africa, Sudan, Tanzania and Zambia.

UNITA terror grows

In a hard-hitting section of the report, the Mechanism warns: "UNITA has
increased its terrorist attacks on innocent civilians. It has attacked
schools, buses and trains. It has shot at people fleeing to escape from the
flames of a burning explosion. It has shot at World Food Programme planes
carrying not weapons but desperately needed food and humanitarian supplies".

It continues that, "during the last six-month period UNITA has pursued its
military activities with attacks in several provinces. The brutal massacre
in August 2001 of over 250 people travelling on one of the few remaining
trains in the country is a glaring example of how civilians are being
targeted. UNITA does not hesitate to use terror, including murder and
abduction of civilians, to pursue its own political agenda".

The Mechanism warns that UNITA has increased its political activity and has
created organisations that are used primarily as channels for UNITA
propaganda. It states that UNITA "representatives" in Europe and the United
States of America have been much more active over the last six months,
disseminating, "propaganda to justify its continuing military activities,
while at the same time arguing for the lifting of Security Council
sanctions".

Later in the report it states that the rebels' "propaganda aims at closing
all opportunities for peace in Angola other than the one that will best
serve the purpose of the armed UNITA. It chooses to disregard the fact that
there is an elected parliament in Angola in which UNITA has 70 seats. The
UNITA external organisation, many of whose members are living well abroad,
disseminates propaganda which demeans those members of UNITA that chose not
to continue the armed struggle but who stayed in, or returned to, Luanda to
participate in the political process".

UNITA's military capacity on the ground

The report examines the current military composition of UNITA, and
underlines that Jonas Savimbi dominates the organisation. According to the
report, many of the first and second generation of the UNITA leadership have
either been assassinated by UNITA itself or have denounced the use of force
and have moved to Luanda to form their own political parties or to be part
of the non-armed UNITA movement.

The report states that there is ample evidence that the UNITA leadership is
currently concentrated in Moxico province. It continues, "Jonas Savimbi is
said to move with 14 or 15 highly trained military guards and a male nurse.
The Vice-President, Antonio Dembo; the Secretary-General, Lucas Paulo
Lukamba Gato; the Secretary for Foreign Affairs, Alcides Sakala; the Chief
of Staff, General Geraldo Abreu "Kamorteiro"; and General Esteves "Kamy"
Pena are also among the people who fled the UNITA strongholds late in 1999
and are now located in Moxico Province".

It points out that due to a government offensive which in late 1999 drove
UNITA out of its strongholds, "there is no longer any
civilian/administrative UNITA organisation of importance in the country".

The report outlines UNITA's current military structure, being headed by the
Chief of Staff, General Geraldo Abreu "Kamorteiro", and Chief of Operations,
General Abilio Kamalata "Numa".

There is a a telecommunications unit (DIVITAC) headed by Brigadier General
Domingos Sopite, a logistics unit, and a unit for political coordination (of
UNITA armed forces) headed by General Mbula Matady. UNITA is said to still
have a good radio network and a capacity to send and receive messages in
code. The most common radios in use are solar powered HGF Racal 5 - 30.

UNITA has two major security organs, being the Brigada de Informaçao Geral
(BIG), and the Service for Clandestine Intelligence, headed by General
Chissende "Buffalo Bill". The report states that "the recent sabotage of an
electrical relay station outside Luanda is an indication that the work of
clandestinidade and BIG deserves special attention. A sabotage of this
nature carried out in the Luanda area is likely to be the result of the
action of the clandestine services".

The report warns that since the second half of 2000, a number of senior
UNITA members have fled eastern Angola for the refugee camps in Zambia, and
that in early 2001 the wives and children of senior UNITA officials went to
the camps.

The report states: "the spouses of senior UNITA military personnel and
activists, including those of General "Kamy" Pena, of the deceased General
"Ben Ben" Pena, of General Aleluia, of special Ambassador Helder "Boris"
Mundombe, and of telecommunications expert Chidinho Gato were given
permission to go to the camps, where their presence has been confirmed. The
head of the UNITA Women's League, Odeth Chilala, has also been identified
there. They began arriving in the camps from March/April 2001".

The Mechanism also warns that at the refugee camp of Nangweshi, is highly
organised and controlled by UNITA. Many from the political leadership of
Jamba fled to this camp before the UNITA town was captured by the Angolan
army, including the former chief of police, who was later elected the chief
representative of the refugees in the camp.

The Mechanism warns of serious indications of the presence of
representatives of BIG in the camp, and that the camp may be used as a
logistic base by UNITA. The Mechanism believes that, "ideally the camp
should be moved further away from the border. Should that not be possible,
another option would be to ensure that the refugee leadership does not
include anyone who had leading functions in Jamba, or who could build up
UNITA control over the camp".

The Mechanism has also reported information that UNITA uses Zambia as a base
for supplies.

UNITA representation abroad

The report points out that UNITA's most important representatives remain in
Belgium, Burkina Faso, France, Ireland, Italy, Portugal, Switzerland, Togo
and the United States.

However, it reports that Togo has decreased in importance as a result of
international pressure. It also states that Cote d'Ivoire has cancelled
passports issued to UNITA officials and family members. Senior UNITA
officials Mines Tadeu and Milu Tonja are reported to be residing in South
Africa, although the authorities have "no record of their presence in South
Africa".

Air Cess fly in arms

The Mechanism has undertaken critical research into the companies behind the
purchasing and shipment of arms to UNITA. Particular attention was paid to
the UAE-based Air Cess, which is owned by Victor Bout. According to the
report, Air Cess is the single carrier of the bulk of the arms shipments
destined for UNITA.

The report alleges that the March 2000 revelation of the involvement of Air
Cess in the continuing violations of sanctions has prompted Victor Bout to
restructure his company's operations, and that he continues his
sanctions-violating activities through a number of subcontractors and
partners.

The Mechanism has tracked some Air Cess flights, with a focus on flights
through Togo, South Africa, Sudan, Kenya and Egypt. It notes the "the
excellent cooperation provided by Egypt, Kenya and the Sudan in providing
the data required".

Through this investigation the Mechanism discovered two Air Cess flights
carrying a total of 58 tonnes of arms from Moldova in 1998. The arms were
sold on the basis of end-user certificates reportedly issued by the Ministry
of Defence of the Republic of Guinea. The Mechanism is also looking into a
number of flights from Uzbekistan.

UNITA seeking fuel

The Mechanism has received allegations that UNITA has recently been
attempting to buy petroleum, and that pilots are being approached and
offered up to $100,000 per delivery. The report names Denis Couglan, who is
based in Botswana, as being allegedly involved in these ventures.

However, the report points out that the Botswanan authorities had
investigated previous allegations against Couglan and concluded that they
were unfounded.

UNITA diamond smuggling

The Mechanism found that diamond smuggling from Angola has continued on a
large scale, and that UNITA continues to play a large part in this, along
with a shadow parallel buying organisation.

The Chief Executive Officer of the Angolan Selling Corporation (ASCorp)
informed the Mechanism that between $1 million and $1.2 million of embargoed
diamonds leave Angola each day, equivalent to $350 million to $420 million a
year. This amount of smuggling represents about five percent of the total
value of global rough diamond supply last year.

The Angolan Government has told the Mechanism that the smuggling is not
mainly carried out by UNITA, but by other players. Action has been taken
against middlemen who have been buying diamonds but not selling them on to
ASCorp as required by law. Recently ASCorp withdrew credentials from 400
middlemen who were found to be involved in this illegal trade.

The Mechanism agrees that UNITA is no longer the main diamond smuggler, as
the rebels probably sell between 25 and 30 percent of illegal Angolan
diamonds. However, this still puts the income to UNITA at around $100
million a year.

The Mechanism highlights the progress in the Kimberley Process, which aims
to put together a woldwide certificate of origin system. It also shows the
efforts of the Angolan government along with the government of Belgium and
diamond industry bodies to crack down on "conflict diamonds".

But the report's message is stark:

"The primary responsibility for intercepting diamonds mined in defiance of
the embargo clearly lies with states, yet diamonds equivalent to the
production of an entire country are reaching markets across the world. To
date not a single parcel of illicit Angolan gems has been intercepted
anywhere, to the knowledge of the Mechanism, beyond one suspect parcel in
Belgium under the previous Angolan certificate-of-origin regime. No diamond
dealer has claimed to have witnessed Angolan gems being traded on any
diamond bourse. These diamonds seem to vanish into thin air after leaving
Angola. How is this even possible, given the magnitude of the trade, which
is close to the value of the output of Australia or Namibia? Perhaps more
importantly, why is it possible for diamonds to vanish?"

The report questions whether there is a shadow buying structure in Angola.
It states that "police and diamond security sources in Angola and sources in
Antwerp have suggested that there is in fact an illegal, "shadow" diamond
buying structure, or structures, operating inside Angola, and this is borne
out by information available to the Mechanism, and by evident corporate
connections between several of the companies under review".

From its analysis, the Mechanism points out that it appears that the Antwerp
and South African markets are two key points of sale or transit for
embargoed diamonds, and that Israel is being used as a laundering route for
some imports.

The Mechanism has received information from several sources stating that
illegal Angolan diamonds are not being traded in the official Bourses in
Antwerp and that this "does suggest that there are hidden systems for
trading all illicit gems from Angola, not just those being mined by UNITA".

The Mechanism points out that UNITA, "trades mainly with companies it trusts
and with whom it has long-standing business relationships. All the available
information points to UNITA and its business associates using
well-established trading routes through neighbouring countries, or to the
use of illegal buyers operating inside Angola, known to UNITA, and having
relationships with the diamond companies working with UNITA".

The Mechanism details efforts by the Angolan government to halt the illicit
trade in diamonds. The Angolan government in September announced that it had
made a Belgian/British company, the Diamond Inspection and Security Corps,
the main security body for the elimination of illicit diamonds, working with
the security team in ASCorp. The new body will report to the vice-Minister
of Geology and Mines every three months.

The decision to give this task to DISC was made when it was realised that
the previous bodies had "failed to take effective action against the
numerous illicit diamond buyers operating from Luanda".

Outside Angola, the Mechanism reported that several countries have been used
as transit points for smuggled diamonds, including Congo-Kinshasa, Tanzania,
South Africa and Zambia.

UNITA finances

The Monitoring Mechanism has been working with Kroll Associates to track
UNITA's financial assets. The investigation has found assets, in the form of
bank accounts, companies and real estate, held in the names of senior UNITA
officials in Cote d'Ivoire, Ireland, Italy, Portugal, Switzerland and the
United States.

It has established that offshore financial centres continue to play a major
role as havens for UNITA funds and in facilitating financial transactions.

The Mechanism has also established that since the announcement of sanctions,
UNITA's network has experienced a decrease in liquidity. The report states
that travel restrictions have proved particularly important in this regard.

The investigation focussed on tracing the financial assets of senior UNITA
officials, networks of smugglers of UNITA diamonds, and other suppliers to
UNITA.

Governments in states where assets have been traced have been contacted for
their comments.

SADC initiatives

The Mechanism outlines the initiatives of the Southern African Development
Community, which has:

* approved a project on mobile radar to control illegal flights across
borders;

* set up a task force to formulate a strategy to stop the supply of
petroleum products to UNITA;

* led the Kimberley Process for a diamond certification scheme, which is to
lead to a ministerial level meeting in Gaborone in November, and is expected
to result in recommendations being put to the next UN General Assembly
meeting in December.

The Organisation of African Unity/African Union has also taken steps to
support sanctions against UNITA, including the establishment of an ad-hoc
committee to monitor sanctions, states the report.

Future of monitoring

The reports states that, "the experience of the Monitoring Mechanism on
Sanctions against UNITA has shown that there is a need for establishing a
permanent capability of the Security Council to ensure ongoing monitoring of
targeted sanctions regimes and illicit trafficking in high-value commodities
in armed conflicts".

It continues that, "such a new unified facility under the authority of the
Security Council would maintain the political momentum gained in recent
years on the question of sanctions enforcement and in the fight against the
illicit trafficking fuelling armed conflicts. It would be cost-effective,
and would avoid duplication of tasks and overlapping of investigations and
ensure the preservation of a comprehensive database as well as its
systematic and continuing processing. It would also permit the establishment
of permanent and fruitful working relations with technical and regional
organisations such as Interpol, ICAO, SADC, ECOWAS, OAU, the Wassenaar
Arrangement and the World Customs Organisation, all of which are essential
partners in an effective implementation of sanctions".

It states that, "a permanent monitoring capability will also strengthen the
enforcement of sanctions, because it will act as a deterrent to potential
violations".

Security Council extends mandate

On 19 October the UN Security Council adopted a resolution extending the
mandate of the Monitoring Mechanism for a further 60 days, during which time
the Mechanism is to provide a Security Council committee with an action plan
for its future work. Four experts are to serve on the Monitoring Mechanism.

-----------------------

The Angola Peace Monitor is produced every month by ACTSA - Action for
Southern Africa.

ACTSA,
28 Penton Street,
London N1 9SA,

e-mail [email protected],
www.actsa.org/apm

fax +44 20 7837 3001,
telephone +44 20 7833 3133.

endsAngola Peace Monitor
Published by ACTSA

-----------------------

Special report
Issue no.2, Vol. VIII
22nd October 2001

-----------------------

UN report's challenge on UNITA's diamond millions

UNITA continues to fund its war in Angola through illegal diamonds sales
worth an estimated $100 million last year, according to the latest report
from the UN Monitoring Mechanism on Sanctions against UNITA, which was
delivered to the President of the UN Security Council on 12 October.

The report (www.un.org/Docs/sc/committees/Angola/966e.pdf) warns that
diamonds worth between $1 million and $1.2 million a day are being smuggled
out of Angola in contravention of UN sanctions - and that much of this
amount sustains the war of the rebel movement UNITA. It points out that,
although UNITA has lost much of its mining capacity, the rebels probably
sell between 25 and 30 percent of the illegal diamonds leaving Angola - not
including sales from its stockpile.

In July 1998 the United Nations imposed an embargo on all Angolan diamonds
which do not pass through official state channels - as guaranteed by a
certificate of origin. This embargo was put in place in an attempt to stop
UNITA gaining funds to pay for its war. The majority of smuggled Angolan
diamonds are now not associated with UNITA, but are the result of either tax
evasion or a huge strategic operation by competitors of the official
diamond-buying organisation ASCorp.

The report also highlights the fact that whilst there are stringent controls
on the legal exports of diamonds from Angola, there are currently few
controls on the export of diamonds from other countries. It is this lack of
an international certification of origin scheme that is being tackled in
Luanda at the penultimate Kimberley Process meeting in Luanda as the Angola
Peace Monitor went to press.

Despite UNITA earning around $100 million last year, the rebels are reported
to be finding it difficult to receive arms and ammunition. The report states
that "the loss of control over airstrips has made flights much more
dangerous for any carrier. The Mechanism's active monitoring of the arms
embargo has also had a deterrent effect".

In an indication that the monitoring of sanctions continues to be a thorn in
the side of UNITA, a spokesperson in Portugal, Joffre Justino, commented
that the report was "illegal and immoral, really miserable" and called for
letters of protest to the UN.

Monitoring Mechanism calls for further action

This was officially the Mechanism's "supplementary" report, having submitted
its "final" report on 21 December 2000 with an addendum on 18 April 2001. It
built on the groundbreaking work of the UN Panel of Experts which on 15
March 2000 published the findings of a major investigation, known as the
"Fowler Report" on how individuals and governments helped UNITA build up a
huge arsenal in return for illegal diamonds (see APM no.7 vol.VI).

This latest report hints at the frustration of the members of the Monitoring
Mechanism when it states that an, "important issue is the status of the
recommendations included in the report presented by the Mechanism on 21
December 2000. The consideration and further implementation of those
recommendations by the Security Council will enable the Member States to
take appropriate action to address the situation, for the better enforcement
of the sanctions".

The UN Security Council has continually deferred accepting or rejecting the
recommendations made by the Panel of Experts in March 2000 and the
Monitoring Mechanism in December 2000. Now there is the possibility that the
Monitoring Mechanism will be wound up, relieving the pressure placed on
states and institutions to implement sanctions.

Sanctions were first placed on UNITA in 1993 following its rejection of the
elections the previous year and its return to war. The first sanctions
banned the sale of arms or petroleum products to UNITA. In October 1997
further sanctions were imposed following UNITA's refusal to abide by its
obligations under the Lusaka Protocol which laid the basis for a negotiated
peace in Angola. These sanctions included the banning of foreign travel by
senior UNITA officials and the closing of UNITA offices abroad. As the
situation in Angola deteriorated further and the extent of UNITA's war
preparations became apparent, further sanctions were imposed in July 1998,
prohibiting the export of all Angolan diamonds which were not sold through
official channels with a certificate of origin issued by the Angolan
government, banning the sale of mining equipment to UNITA, and freezing its
bank accounts.

The report points out that, "in 1999 the Security Council recognised that
the imposition of sanctions alone, without the capacity to identify
violators and monitor compliance, was insufficient".

The Mechanism was given the task of collecting information and investigating
leads relating to violations of sanctions "with a view to improving the
implementation of the measures imposed against UNITA". It is composed of
five members, Ambassador Juan Larrain (Chile), Ambassador Lena Sundh
(Sweden), Christine Gordon (Britain), Ismaela Seck (Senegal), and Wilson
Kalumba (Zambia).

During the last six months the Mechanism has visited Angola, Belgium,
Botswana, Burkina Faso, Côte d'Ivoire, France, Kenya, Portugal, South
Africa, Sudan, Tanzania and Zambia.

UNITA terror grows

In a hard-hitting section of the report, the Mechanism warns: "UNITA has
increased its terrorist attacks on innocent civilians. It has attacked
schools, buses and trains. It has shot at people fleeing to escape from the
flames of a burning explosion. It has shot at World Food Programme planes
carrying not weapons but desperately needed food and humanitarian supplies".

It continues that, "during the last six-month period UNITA has pursued its
military activities with attacks in several provinces. The brutal massacre
in August 2001 of over 250 people travelling on one of the few remaining
trains in the country is a glaring example of how civilians are being
targeted. UNITA does not hesitate to use terror, including murder and
abduction of civilians, to pursue its own political agenda".

The Mechanism warns that UNITA has increased its political activity and has
created organisations that are used primarily as channels for UNITA
propaganda. It states that UNITA "representatives" in Europe and the United
States of America have been much more active over the last six months,
disseminating, "propaganda to justify its continuing military activities,
while at the same time arguing for the lifting of Security Council
sanctions".

Later in the report it states that the rebels' "propaganda aims at closing
all opportunities for peace in Angola other than the one that will best
serve the purpose of the armed UNITA. It chooses to disregard the fact that
there is an elected parliament in Angola in which UNITA has 70 seats. The
UNITA external organisation, many of whose members are living well abroad,
disseminates propaganda which demeans those members of UNITA that chose not
to continue the armed struggle but who stayed in, or returned to, Luanda to
participate in the political process".

UNITA's military capacity on the ground

The report examines the current military composition of UNITA, and
underlines that Jonas Savimbi dominates the organisation. According to the
report, many of the first and second generation of the UNITA leadership have
either been assassinated by UNITA itself or have denounced the use of force
and have moved to Luanda to form their own political parties or to be part
of the non-armed UNITA movement.

The report states that there is ample evidence that the UNITA leadership is
currently concentrated in Moxico province. It continues, "Jonas Savimbi is
said to move with 14 or 15 highly trained military guards and a male nurse.
The Vice-President, Antonio Dembo; the Secretary-General, Lucas Paulo
Lukamba Gato; the Secretary for Foreign Affairs, Alcides Sakala; the Chief
of Staff, General Geraldo Abreu "Kamorteiro"; and General Esteves "Kamy"
Pena are also among the people who fled the UNITA strongholds late in 1999
and are now located in Moxico Province".

It points out that due to a government offensive which in late 1999 drove
UNITA out of its strongholds, "there is no longer any
civilian/administrative UNITA organisation of importance in the country".

The report outlines UNITA's current military structure, being headed by the
Chief of Staff, General Geraldo Abreu "Kamorteiro", and Chief of Operations,
General Abilio Kamalata "Numa".

There is a a telecommunications unit (DIVITAC) headed by Brigadier General
Domingos Sopite, a logistics unit, and a unit for political coordination (of
UNITA armed forces) headed by General Mbula Matady. UNITA is said to still
have a good radio network and a capacity to send and receive messages in
code. The most common radios in use are solar powered HGF Racal 5 - 30.

UNITA has two major security organs, being the Brigada de Informaçao Geral
(BIG), and the Service for Clandestine Intelligence, headed by General
Chissende "Buffalo Bill". The report states that "the recent sabotage of an
electrical relay station outside Luanda is an indication that the work of
clandestinidade and BIG deserves special attention. A sabotage of this
nature carried out in the Luanda area is likely to be the result of the
action of the clandestine services".

The report warns that since the second half of 2000, a number of senior
UNITA members have fled eastern Angola for the refugee camps in Zambia, and
that in early 2001 the wives and children of senior UNITA officials went to
the camps.

The report states: "the spouses of senior UNITA military personnel and
activists, including those of General "Kamy" Pena, of the deceased General
"Ben Ben" Pena, of General Aleluia, of special Ambassador Helder "Boris"
Mundombe, and of telecommunications expert Chidinho Gato were given
permission to go to the camps, where their presence has been confirmed. The
head of the UNITA Women's League, Odeth Chilala, has also been identified
there. They began arriving in the camps from March/April 2001".

The Mechanism also warns that at the refugee camp of Nangweshi, is highly
organised and controlled by UNITA. Many from the political leadership of
Jamba fled to this camp before the UNITA town was captured by the Angolan
army, including the former chief of police, who was later elected the chief
representative of the refugees in the camp.

The Mechanism warns of serious indications of the presence of
representatives of BIG in the camp, and that the camp may be used as a
logistic base by UNITA. The Mechanism believes that, "ideally the camp
should be moved further away from the border. Should that not be possible,
another option would be to ensure that the refugee leadership does not
include anyone who had leading functions in Jamba, or who could build up
UNITA control over the camp".

The Mechanism has also reported information that UNITA uses Zambia as a base
for supplies.

UNITA representation abroad

The report points out that UNITA's most important representatives remain in
Belgium, Burkina Faso, France, Ireland, Italy, Portugal, Switzerland, Togo
and the United States.

However, it reports that Togo has decreased in importance as a result of
international pressure. It also states that Cote d'Ivoire has cancelled
passports issued to UNITA officials and family members. Senior UNITA
officials Mines Tadeu and Milu Tonja are reported to be residing in South
Africa, although the authorities have "no record of their presence in South
Africa".

Air Cess fly in arms

The Mechanism has undertaken critical research into the companies behind the
purchasing and shipment of arms to UNITA. Particular attention was paid to
the UAE-based Air Cess, which is owned by Victor Bout. According to the
report, Air Cess is the single carrier of the bulk of the arms shipments
destined for UNITA.

The report alleges that the March 2000 revelation of the involvement of Air
Cess in the continuing violations of sanctions has prompted Victor Bout to
restructure his company's operations, and that he continues his
sanctions-violating activities through a number of subcontractors and
partners.

The Mechanism has tracked some Air Cess flights, with a focus on flights
through Togo, South Africa, Sudan, Kenya and Egypt. It notes the "the
excellent cooperation provided by Egypt, Kenya and the Sudan in providing
the data required".

Through this investigation the Mechanism discovered two Air Cess flights
carrying a total of 58 tonnes of arms from Moldova in 1998. The arms were
sold on the basis of end-user certificates reportedly issued by the Ministry
of Defence of the Republic of Guinea. The Mechanism is also looking into a
number of flights from Uzbekistan.

UNITA seeking fuel

The Mechanism has received allegations that UNITA has recently been
attempting to buy petroleum, and that pilots are being approached and
offered up to $100,000 per delivery. The report names Denis Couglan, who is
based in Botswana, as being allegedly involved in these ventures.

However, the report points out that the Botswanan authorities had
investigated previous allegations against Couglan and concluded that they
were unfounded.

UNITA diamond smuggling

The Mechanism found that diamond smuggling from Angola has continued on a
large scale, and that UNITA continues to play a large part in this, along
with a shadow parallel buying organisation.

The Chief Executive Officer of the Angolan Selling Corporation (ASCorp)
informed the Mechanism that between $1 million and $1.2 million of embargoed
diamonds leave Angola each day, equivalent to $350 million to $420 million a
year. This amount of smuggling represents about five percent of the total
value of global rough diamond supply last year.

The Angolan Government has told the Mechanism that the smuggling is not
mainly carried out by UNITA, but by other players. Action has been taken
against middlemen who have been buying diamonds but not selling them on to
ASCorp as required by law. Recently ASCorp withdrew credentials from 400
middlemen who were found to be involved in this illegal trade.

The Mechanism agrees that UNITA is no longer the main diamond smuggler, as
the rebels probably sell between 25 and 30 percent of illegal Angolan
diamonds. However, this still puts the income to UNITA at around $100
million a year.

The Mechanism highlights the progress in the Kimberley Process, which aims
to put together a woldwide certificate of origin system. It also shows the
efforts of the Angolan government along with the government of Belgium and
diamond industry bodies to crack down on "conflict diamonds".

But the report's message is stark:

"The primary responsibility for intercepting diamonds mined in defiance of
the embargo clearly lies with states, yet diamonds equivalent to the
production of an entire country are reaching markets across the world. To
date not a single parcel of illicit Angolan gems has been intercepted
anywhere, to the knowledge of the Mechanism, beyond one suspect parcel in
Belgium under the previous Angolan certificate-of-origin regime. No diamond
dealer has claimed to have witnessed Angolan gems being traded on any
diamond bourse. These diamonds seem to vanish into thin air after leaving
Angola. How is this even possible, given the magnitude of the trade, which
is close to the value of the output of Australia or Namibia? Perhaps more
importantly, why is it possible for diamonds to vanish?"

The report questions whether there is a shadow buying structure in Angola.
It states that "police and diamond security sources in Angola and sources in
Antwerp have suggested that there is in fact an illegal, "shadow" diamond
buying structure, or structures, operating inside Angola, and this is borne
out by information available to the Mechanism, and by evident corporate
connections between several of the companies under review".

From its analysis, the Mechanism points out that it appears that the Antwerp
and South African markets are two key points of sale or transit for
embargoed diamonds, and that Israel is being used as a laundering route for
some imports.

The Mechanism has received information from several sources stating that
illegal Angolan diamonds are not being traded in the official Bourses in
Antwerp and that this "does suggest that there are hidden systems for
trading all illicit gems from Angola, not just those being mined by UNITA".

The Mechanism points out that UNITA, "trades mainly with companies it trusts
and with whom it has long-standing business relationships. All the available
information points to UNITA and its business associates using
well-established trading routes through neighbouring countries, or to the
use of illegal buyers operating inside Angola, known to UNITA, and having
relationships with the diamond companies working with UNITA".

The Mechanism details efforts by the Angolan government to halt the illicit
trade in diamonds. The Angolan government in September announced that it had
made a Belgian/British company, the Diamond Inspection and Security Corps,
the main security body for the elimination of illicit diamonds, working with
the security team in ASCorp. The new body will report to the vice-Minister
of Geology and Mines every three months.

The decision to give this task to DISC was made when it was realised that
the previous bodies had "failed to take effective action against the
numerous illicit diamond buyers operating from Luanda".

Outside Angola, the Mechanism reported that several countries have been used
as transit points for smuggled diamonds, including Congo-Kinshasa, Tanzania,
South Africa and Zambia.

UNITA finances

The Monitoring Mechanism has been working with Kroll Associates to track
UNITA's financial assets. The investigation has found assets, in the form of
bank accounts, companies and real estate, held in the names of senior UNITA
officials in Cote d'Ivoire, Ireland, Italy, Portugal, Switzerland and the
United States.

It has established that offshore financial centres continue to play a major
role as havens for UNITA funds and in facilitating financial transactions.

The Mechanism has also established that since the announcement of sanctions,
UNITA's network has experienced a decrease in liquidity. The report states
that travel restrictions have proved particularly important in this regard.

The investigation focussed on tracing the financial assets of senior UNITA
officials, networks of smugglers of UNITA diamonds, and other suppliers to
UNITA.

Governments in states where assets have been traced have been contacted for
their comments.

SADC initiatives

The Mechanism outlines the initiatives of the Southern African Development
Community, which has:

* approved a project on mobile radar to control illegal flights across
borders;

* set up a task force to formulate a strategy to stop the supply of
petroleum products to UNITA;

* led the Kimberley Process for a diamond certification scheme, which is to
lead to a ministerial level meeting in Gaborone in November, and is expected
to result in recommendations being put to the next UN General Assembly
meeting in December.

The Organisation of African Unity/African Union has also taken steps to
support sanctions against UNITA, including the establishment of an ad-hoc
committee to monitor sanctions, states the report.

Future of monitoring

The reports states that, "the experience of the Monitoring Mechanism on
Sanctions against UNITA has shown that there is a need for establishing a
permanent capability of the Security Council to ensure ongoing monitoring of
targeted sanctions regimes and illicit trafficking in high-value commodities
in armed conflicts".

It continues that, "such a new unified facility under the authority of the
Security Council would maintain the political momentum gained in recent
years on the question of sanctions enforcement and in the fight against the
illicit trafficking fuelling armed conflicts. It would be cost-effective,
and would avoid duplication of tasks and overlapping of investigations and
ensure the preservation of a comprehensive database as well as its
systematic and continuing processing. It would also permit the establishment
of permanent and fruitful working relations with technical and regional
organisations such as Interpol, ICAO, SADC, ECOWAS, OAU, the Wassenaar
Arrangement and the World Customs Organisation, all of which are essential
partners in an effective implementation of sanctions".

It states that, "a permanent monitoring capability will also strengthen the
enforcement of sanctions, because it will act as a deterrent to potential
violations".

Security Council extends mandate

On 19 October the UN Security Council adopted a resolution extending the
mandate of the Monitoring Mechanism for a further 60 days, during which time
the Mechanism is to provide a Security Council committee with an action plan
for its future work. Four experts are to serve on the Monitoring Mechanism.

-----------------------

The Angola Peace Monitor is produced every month by ACTSA - Action for
Southern Africa.

ACTSA,
28 Penton Street,
London N1 9SA,

e-mail [email protected],
www.actsa.org/apm

fax +44 20 7837 3001,
telephone +44 20 7833 3133.

ends