Calls for UK to take responsibility for role in Mozambique debt crisis

By agency reporter
September 20, 2017

The UK Secretary of State for International Trade, Liam Fox, is visiting Mozambique this week. The country is in a debt crisis after Mozambican officials borrowed $2 billion from the branches of two London based banks, Credit Suisse and VTB Capital, in 2013.

Many of the loans were kept hidden until 2016, none were agreed by the Mozambique parliament, making them illegal under Mozambique law, and there are major questions over the due diligence Credit Suisse and VTB conducted before the loans were given.

Commenting ahead of Liam Fox's visit, Sarah-Jayne Clifton, Director of the Jubilee Debt Campaign, said: “The UK needs to take responsibility for the actions of London-based banks in arranging $2 billion of loans to Mozambique. Credit Suisse should be made to release the due diligence it undertook before lending the money, and investigated for whether the bank undertook the enhanced due diligence required by UK Money Laundering regulations. Furthermore, the UK government should take immediate action to ensure all loans to governments given under UK law are publicly disclosed when they are given.”

US company Kroll have been commissioned to conduct an audit into the loans, but have been prevented from completing it because of the lack of information given to them by Mozambique government officials and Credit Suisse.

The audit so far has revealed that:

  • A condition of Credit Suisse to get the loans signed off by the Bank of Mozambique was dropped in order for the loans to be given
  • Credit Suisse and VTB gave or arranged loans to three companies which had no revenue, and without the contracts in place to suggest that they would generate revenue in the future
  • There is an unexplained difference of between $683 million and $714 million on what was paid for equipment bought by the loans, and its expected cost

The audit report states Credit Suisse has not released its due diligence, and that the Mozambique Attorney General should ask UK Authorities to make Credit Suisse release it.

The audit also says that: “Credit Suisse, as a UK financial institution, has an obligation under the UK Money Laundering regulations to undertake enhanced due diligence where these is the prospect of Politically Exposed Persons being a party to the financial transaction.”

“Further, Credit Suisse, has an obligation under the UK Money Laundering regulations to establish the Ultimate Beneficial Owner(s) of the Mozambique companies.”

* Jubilee Debt Campaign


Although the views expressed in this article do not necessarily represent the views of Ekklesia, the article may reflect Ekklesia's values. If you use Ekklesia's news briefings please consider making a donation to sponsor Ekklesia's work here.