Commercial Crime International (UK's International Chamber of Commerce)
Commercial crime may not be as omnipresent in North Africa as in some other parts of the world, but companies operating in the region still have risks to contend with. Corruption is rife, smuggling across the borders with sub-Saharan countries is a major activity, and terrorist groups such as Al Qaeda in the Islamic Maghreb (AQIM) are in the ascendancy. Kaci Racelma in Algeria and Paul Cochrane in Lebanon take a detailed look at these problems.
“Corruption is systemic in all of the Maghreb, and that is not likely to change,” said Dr Geoff Porter, a political risk and security consultant specialising in North Africa. “We’ll have to see what happens in Tunisia. It was a cesspool of corruption under the previous government and while the new one seems to have a zero tolerance policy to corruption, it has not been in power long enough to gauge its effectiveness,” said Dr Porter, founder of US-based North Africa Risk Consulting.
Furthermore, the region is in a state of turmoil following the uprisings that overthrew the Tunisian and Libyan regimes in 2011, with an estimated 250 militias still armed in Libya and reports of some 20,000 surface-to-air missiles having gone missing during the conflict.
Dr Porter added that one of the biggest operational costs to international companies that do not have major contracts with governments comes from corruption at the customs level. “One of the over arching problems that affects all of North Africa is corruption within customs and border control. If one enters the civil service in Morocco, Libya or elsewhere, the opportunity for graft is the largest in customs,” said Dr Porter. “Larger scale corruption is at the ports where import permits can be voided.”
Operational risk is also high along the southern borders and in the sub- Saharan nations of Niger and Mali, where kidnappings for ransom have occurred. The most high profile case was in 2010 when seven employees of French nuclear energy companies Vinci and Areva were kidnapped by the AQIM in northern Niger. While three of the hostages have been released, four remain in captivity. With AQIM particularly active in Niger and Mali, “companies should be concerned about this,” said Dr Porter. These problems are also apparent over their northern border with Algeria, where business visitors were alarmed by the kidnapping of a 56-year-old Italian tourist last year. These fears were intensified by a travel warning issued this January by the French government, which told French travellers not to visit southern Algeria. Furthermore, the Algerian government has closed the Tassili mountains to visitors over an increase in the presence of terrorist groups and smugglers following the Libya civil war and unrest in northern Mali.
Algerian security services have devoted resources and launched targeted missions to reduce these threats across the south of their country: road blocks have been reinforced and police assigned to protect travelling foreigners. Even so, the flow of visitors has decreased to a trickle – there have only been 10 European tourists daring to visit southern Algeria since September 2011, said one travel agent in the regional centre of Tamanrasset.
This spike in crime and terrorism has the Algerian government concerned over its impact on money laundering and terrorist financing, especially as police allege a connection between drug traffickers and terrorists involved in the kidnapping of foreign tourists. The Saharan area of Tamanrasset in southern Algeria is considered to be the hub of Algerian money laundering, fuelled by active hawala networks in the city. As part of the fight back, Tamanrasset security services in 2011 arrested 1,367 people, launching 1,027 judicial prosecutions.
Algeria’s intention to cut funding for terrorism dates back to 2005, when the government decided it would tighten rules against dirty money flows in general and terror finance in particular. Since then there has been a steady flow of anti-money laundering regulations introduced. These culminated in an attempt in April 2011 by the authorities to oblige any person or legal entity to justify the origin of any payment of an amount in excess of Algerian dinars DZD100,000 (USD$1,345).
Meanwhile, the overthrow of Muammar Gaddafi’s regime in Libya has undermined security in neighbouring Algeria, Niger, Mali and Chad. It has destabilised the region of Tamanrasset because countless weapons have been transported to northern Mali from the Libyan conflict. Smuggled weapons including assault rifles, machine guns, mortars and rockets have been traded and for organised crime, combining this with drug trafficking has generated much wealth.
Algeria’s fight against these increasingly powerful networks has provoked a significant response: a bomb attack on March 3 targeted the Tamanrasset headquarters of the national gendarmerie. This, Algerian security forces sources said, was considered retaliation to the successful efforts to choke off funding and recruitment to terror groups in the region. Indeed, two multi-national conferences were held in the Algerian capital during 2011, and Algeria has established a committee of staff joint operation command centre in Tamanrasset. This committee of joint military chiefs includes officers from Mali, Mauritania and Niger and they have been charged with clamping down on terrorist recruitment in southern Algeria, and monitoring organised crime groups who funnel potential cadres to terror groups. The Algerian security services have also been particularly active since a regional governor was kidnapped in Illizi in January 16.
Smuggling a major problem
Despite this influx of security services, smuggling has continued apace in the region. In a visit to Tamanrasset in January 2012, the director general of Algeria’s customs organisation Mohamed Abdou Bouderbala said the government would develop new customs control facilities in southern border areas. “With the suitable equipment the Algerian authorities will succeed to keep the pressure on traffickers. These new structures will be equipped with appropriate controls to customs activities and provide good working conditions for customs,” said Bouderbala. He inspected various departments, visiting to the region of Aïn M’guel (130 km from Tamanrasset), the headquarters of the country’s mobile customs brigade (Brigades mobiles des douanes), which patrols the desert zones that serve as an unfenced border between Algeria and its southern neighbours.
Meanwhile, there is widespread concern that the democratic process in Algeria is being subverted by smuggling groups. On March 8, activists of the political party, Democratic National Rally (DNR), surrounded the office of their party in Tamanrasset to protest about its local list of candidates standing for the Algerian parliament. Demonstrators demanded the withdrawal of the names of candidates they claimed were associated with organised crime. “We never accept to be represented in the parliament by people involved in the smuggling and the acquisition of dirty wealth,” one activist told Commercial Crime International.