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Viewing cable 09MAPUTO713, RISING CONCERNS ABOUT NARCOTRAFFICKING AND MONEY

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Reference ID Created Released Classification Origin
09MAPUTO713 2009-07-01 04:04 2010-12-08 21:09 SECRET//NOFORN Embassy Maputo
VZCZCXRO3029
RR RUEHBZ RUEHDU RUEHMR RUEHRN
DE RUEHTO #0713/01 1820455
ZNY SSSSS ZZH
R 010455Z JUL 09
FM AMEMBASSY MAPUTO
TO RUEHC/SECSTATE WASHDC 0443
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHLO/AMEMBASSY LONDON 0430
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHDC
RUEABND/DEA WASHDC
RUEAWJA/DEPT OF JUSTICE WASHINGTON DC
RHEFDIA/DIA WASHDC
RUCNFB/FBI WASHDC
RHEHNSC/NSC WASHDC
S E C R E T SECTION 01 OF 03 MAPUTO 000713 

SIPDIS 
NOFORN 

E.O. 12958: DECL: 06/25/2019 
TAGS: SNAR EFIN KCOR PTER PGOV PREL MZ
SUBJECT: RISING CONCERNS ABOUT NARCOTRAFFICKING AND MONEY 
LAUNDERING IN MOZAMBIQUE 

REF: A. 08 MAPUTO 1228 
B. 08 MAPUTO 1098 

Classified By: Charge d'Affaires Todd C.Chapman, Reasons 1.4(b+d) 

1. (S/NF) Summary: Large-scale narcotics shipments pass 
through Mozambique, taking advantage of a vast and lightly 
guarded coastline. Money laundering may be increasing. 
Narcotraffickers in the country have connections to South 
Asia, and some appear to have links to the ruling Frelimo 
party and the GRM. Using Department of State INL funds, the 
Embassy has led a successful border security program with the 
Portuguese Embassy that has resulted in the seizure of 
narcotics. The mission has also provided support via DoD and 
Treasury, and directed counternarcotic assessments by the 
Africa Command, LegAtt, and DEA. While not a 
thoroughly-corrupted narco-state, the trends in Mozambique 
suggest cause for concern unless the GRM takes quick action 
to address these growing problems. End Summary. 

------------------------------- 
Large Scale Narcotics Shipments 
------------------------------- 

2. (S/NF) In a series of investigative reports late last 
year, Mozambique newsweekly Zambeze claimed Mozambique was 
considered by some estimates to be the second largest drug 
transit country in Africa after Guinea-Bissau. XXXXXXXXXXXX
Recent incidents suggest that larger amounts of 
narcotics are indeed passing through the country, taking 
advantage of a coastline twice the length of California's 
with minimal control. Long-time commentator on Mozambique 
Joseph Hanlon publicly declared in May that the value of 
illicit drugs passing through the country probably surpasses 
combined legal external trade. In mid-May, police seized $5 
million in heroin at the Ressano Garcia-Lebombo border with 
South Africa. In mid-June, police destroyed 7,000 liters of 
precursor chemicals discovered at the port of Maputo from 
China en route to South Africa; the United Nations Office of 
Drug Control indicates that this port is heavily used to 
import chemicals used for meth production. XXXXXXXXXXXX
 have described to P/E chief how 
Pakistani-owned trucking companies based in Sofala province 
over-declare imports at the Beira port as one way to hide the 
quantities of drugs coming into the country. Early on June 
20, police discovered about one ton of hashish at Chongouene 
beach in Gaza province after receiving calls from local 
fishermen about suspicious vehicle movements in the area. 

------------------------------------- 
Signs of Money Laundering Proliferate 
------------------------------------- 

3. (S/NF) A source inside the Frelimo party recently told 
the Embassy that Mozambique, with ten banks and thirty 
legally-registered exchange houses, has significantly more 
financial institutions than the market in such an 
impoverished country should be able to support with 
legitimate business. He also observed that 1500 construction 
projects are currently underway in Maputo--most financed with 
cash and mostly in real estate, and noted that it was unusual 
that housing prices in Maputo are increasing in spite of the 
world financial crisis. Separately, Hanlon indicates that 
the rapid growth in Mozambique's stock market is suspect, as 
the value of stocks listed on the exchange is predicted to 
reach $100 million within two years of opening. Finally, lax 
regulation of casinos has raised concern by local radio and 
TV commentators about that sector's role in money laundering. 

--------------------------- 
Criminal Ties to South Asia 
--------------------------- 

4. (S/NF) A USAID report issued in 2006 notes that commerce 
in Maputo depends on the financial acumen of a small number 
of Muslims of South Asian-descent who contribute generously 
to the FRELIMO party. A major contributor to former 
President Chissano and President Guebuza from this community, 
who resides less than a hundred meters from the Presidential 
Compound, Mohamed Bashir Suleman (MBS), is the owner of the 

MAPUTO 00000713 002 OF 003 


commercial MBS Group. Contacts at all levels have advised 
Emboffs that MBS is a known large-scale narco-trafficker. 
They indicate that MBS uses his FRELIMO party connections, as 
well as his shopping mall, supermarkets, and hotels to import 
narcotics and launder money without official scrutiny. Other 
South Asian businessmen with ties to FRELIMO also operate a 
vast network of loosely-regulated money changing houses, 
which reportedly maintain financial ties with more radical 
organizations in 
Pakistan and elsewhere. 

5. (S/NF) A business contact recently shared with P/E chief 
a copy of a letter from Mozambique's Chamber of Business 
Associations (CTA) to the Prime Minister, expressing concern 
about one company selling imported vegetable oils at prices 
clearly below cost, noting that this type of price dumping 
could result in the withdrawal from the market of other 
companies and ultimately a monopoly to form. The contact 
said that the letter was in response to efforts by the MBS 
Group to consolidate control of this sector--but in reality 
the message had nothing to do with vegetable oil--rather, it 
was a veiled warning from the 
business community to the government that MBS Group's use of 
vegetable oil to cover the import of illicit drugs was so 
brazen that it was no longer tolerable. 

------------------------------------ 
Narcotrafficking Connections in GRM? 
------------------------------------ 

6. (S/NF) The Frelimo source also told the Charge that MBS 
Group regularly uses phantom imports to launder money, and 
indicated that MBS and another immigrant, Ahmed Gassan (owner 
of the Home Center Furniture store) collude with the GRM's 
head of customs (who he called "the King of Corruption") 
to reduce scrutiny on imports. The source also indicated 
that Gassan's business interests are personally protected by 
Minister of Planning and Development Aiuba Cuereneia. 

--------------------------------------------- ---------- 
USG Border Security, OTA, DoD Support, Other Assessments 
--------------------------------------------- ---------- 

7. (C) Using Department of State INL bureau funds, the 
Embassy has a highly-successful joint project with the 
Embassy of Portugal to provide training for GRM border 
guards. With a very small investment of less than $200,000, 
this program has led to the seizure of $2.5 million in cash 
and the arrest of two Pakistani smugglers (ref B). While the 
program was denied funding in FY09, it may receive support 
again in FY10. Mozambique's Tax Authority (AT) has garnered 
a reputation for honesty and transparency, and the AT's 
director has publicly criticized the head of Customs about 
smuggling concerns. Via the Department of Treasury's Office 
of Technical Assistance, the USG is providing training and 
capacity building to the AT, and is reviewing ways to 
specifically support the AT's Financial Intelligence Unit. 
DoD provided maritime training, small boats , and coastal 
monitoring systems to the FADM and more of this type of 
support is programmed for the future. Finally, at the 
request of the Embassy, Africa Command, DEA, Treasury and 
LegAtt representatives visited Maputo in early June to 
conduct a joint assessment of the drug trafficking problem 
and the GRM's capabilities. Initial findings validated the 
pervasiveness of the problem and identified the institutional 
weakness and level of corruption of Mozambican law 
enforcement agencies as core problems inhibiting a coherent 
government response. 

8. (SBU) At the most recent mini-Dublin meeting chaired in 
late-May by the Portuguese Embassy, representatives from the 
Dutch, British and German embassies specifically pointed out 
weaknesses in the GRM's enforcement activities, highlighting 
that concerns are widespread in the international community. 
These concerns were quickly borne out, as in a presentation 
at the meeting, a representative of the GRM's Inter-agency 
Working Group on Narcotrafficking focused entirely on 
domestic consumption and addressing the health needs of local 
drug addicts. 

--------------------------------------------- ----------- 
Comment: Not Thoroughly-Corrupted, but Cause for Concern 

MAPUTO 00000713 003 OF 003 


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

9. (S/NF) Mozambique most certainly is not yet a 
thoroughly-corrupted narco-state. However, it is becoming 
increasingly clear that the magnitude of the drug shipments 
passing through Mozambique may be on a much larger scale than 
previously understood, taking advantage of the country's long 
and unprotected coast and the facility with which port and 
customs officials can be bribed. Money laundering, related 
government corruption (possibly even official support), and 
ties to South Asia mean that the problem has the potential to 
get much worse. While the mission has made initial steps to 
bring USG resources to bear, the road ahead will require a 
comprehensive and coordinated effort by the international 
community to staunch the flow of drugs, not to mention 
strengthen the political will of the GRM to take concrete 
action. 
CHAPMAN