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Special Report

Legal Analysis: Rwanda’s Approval Of Prime Minister’s Order On Human Trafficking, Victim’s Protection Is Great Step

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Rwanda has adopted a Prime Minister’s Order for the protection of Human trafficking Victims and this is a big step towards conformity with main international instruments on human trafficking that Rwanda has ratified, notably- including among others, the Protocol to Prevent, Suppress and Punish Trafficking in Persons Especially Women and Children, supplementing the United Nations Convention against Transnational Organized Crime, 2000 (commonly known as the Palermo Protocol).

It was not until 2012, that trafficking in persons was criminalized and punished under Law N° 01/2012/OL of May 2, 2012 Instituting the Penal Code of Rwanda, which criminalized for the first time “Offences related to Human Trafficking, Illegal Removal, Sale and Use of Human Body Organs.

In 2018, Human Trafficking was legislated with a specific law N° 51/2018 of August 13, 2018 Relating to the Prevention, Suppression, and Punishment of Trafficking in Persons and Exploitation of Others, Official Gazette N° 39 of September 24, 2019 (Hereinafter “Rwandan Anti-Trafficking Legislation”).

It is in the light of the state responsibilities derived from such international instruments that Rwanda has adopted various measures aimed at combating human trafficking and in the meantime dealing with its negative aftermaths. In that regard, that a Counter Trafficking Legislation is in force.

It is therefore important and evident that the Rwandan Counter-trafficking legislation has remained in conformity with the international anti-trafficking laws, especially the Palermo Protocol. Such conformity is usually assessed in mirrors of criminalisation, victim protection and prevention.

Rwandan anti-trafficking law provides for protection of human trafficking victims which is in conformity with the provisions of the Palermo Protocol especially in its article 6 which creates obligations to its state parties to this protocol.

Protective mechanisms for human trafficking victims under Rwanda law (especially in its Articles Art. 10, 11, 12,13) include; keeping the identity of the victims confidential, preventing them from discrimination of any kind, giving them special treatment, repatriation of foreign victims or even allowing them to stay in Rwanda, plus not holding them criminally liable for illegal entering Rwanda as well as several exclusive protective measures for child victims inter alia.

The Palermo Protocol aims at three main objectives as provided in its article 2 and those are; (a) To prevent and combat trafficking in persons, paying particular attention to women and children; (b) To protect and assist the victims of such trafficking, with full respect for their human rights; and (c) To promote cooperation among States Parties in order to meet those objectives.

The scope of Palermo Protocol covers the acts of human trafficking which are cross boarder or transnational as stipulated in its article 4.

However, Rwandan anti-trafficking law under its article 11 paragraph 2, in as far as victim protection is concerned provided for a specific ministerial order that would detail all the kinds of protective measures to the victims of human trafficking. In Article 11, Paragraph 2 of the Rwandan Counter Trafficking legislation, it states that; “An Order of the Minister provides for other particular means for support to the victim and services made available to him/her.”

The ministry referred to therein is the ministry in charge of justice. Additionally, the anti-trafficking law provides for a Prime Minister’s order which has been approved by the cabinet of July 14, and this is a big step towards victim protection as outlined above. Article 15 of the Rwandan counter-trafficking legislation provides “A Prime Minister’s Order determines an organ responsible for providing necessary means to cover the cost of transportation and repatriation to Rwanda of the victim and modalities for their allocation.

The Prime Minister’s order, has therefore come as a guarantee to victim’s protection required by the Rwandan law.

The author is an advocate with the Rwanda Bar Association and a PhD Researcher at Tilburg University Graduate Law School, Netherlands, focusing on dynamics and challenges of addressing human trafficking in Rwanda in view of the emerging investigations and prosecutions.

 

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RWANDA SUMMER GOLF II

Rwanda Summer Golf 2nd Edition Kicks Off On Lake Muhazi Shores

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On a quiet sunny Saturday morning, golfers and other merry makers drove to Rwamagana district in Rwanda’s Eastern Province to usher in the second edition of the prestigious annual Summer Golf tournament.

This day has coincided with the countrywide grassroots elections that also kicked off much earlier at about 6AM and ended in about three hours to allow people move on with daily routines.

Taarifa team is on site to provide you with prompt and live coverage both on the publication’s main websites and social media platforms.

The event held at Falcon golf and country club is being conducted under strict guidelines aimed at preventing the further spread of Covid-19.

A massive team of youth volunteers and health experts are on site from the entrance and  into the golf course. 

You need to arrive at the site after testing negative to Covid-19 otherwise health experts at the gate will ask you to return to Rwamagana town and get tested.

Keep hooked to Taarifa for more updates

 

Click to take a tour of Rwanda Summer Golf 1st Edition

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Special Report

Pandora Papers Expose Mega Fraud By Zimbabwean Tycoon Billy Rautenbach

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In 2013, one of Zimbabwe’s richest men and arguably one of the most controversial business figures in southern Africa, Muller Conrad “Billy” Rautenbach, donated multimillion-dollar financial investments in his coal and ethanol businesses to his wife.

This restructuring was explained by the need to “compensate” her for her role in building the family’s wealth.

It would kick off a process in which Jenny Lynn Rautenbach, who also uses her maiden name, Noon, would take the lead in establishing a complex offshore family trust fund meant to preserve and grow the family’s assets for generations to come.

With the assistance of Singapore-based trust specialist Asiaciti and other advisers, by 2015 Noon was the settlor of the family’s Bonsai Business Trust which owned a non-tradeable family investment fund listed on the Singapore Exchange (SGX).

The main assets of the fund were intercompany loans (at punitive interest rates) repayable by Rautenbach’s businesses in Zimbabwe.

But a closer look suggests that the donation was just a formality and Rautenbach, who was under United States sanctions at the time, was still in control.

As one administrator clarified in an email, Noon was a “very indirect passive investor into the fund [and who does not even have direct profit entitlement or any kind of investment say]”.

The donation had the effect of distancing Rautenbach at a time when he was still under sanctions – and positioning the family to suck maximum benefit from the Zimbabwe operations should they ever be profitable enough to service the loans.

Records of the Rautenbach marriage settlement and family trust fund are amongst a batch of 1,8 million files leaked from Asiaciti’s computer servers.

The data provides a partial window into Rautenbach’s more recent business exploits – including details about the significant financial losses sustained by his company Green Fuel, a U$300-million ethanol joint venture company with the Zimbabwean government that has been described as “his greatest achievement”.

The files form part of the Pandora Papers, an anonymous leak of more than 11,9 million documents from the databases of 14 corporate service providers that set up and manage shell companies and trusts in tax havens around the globe.

The International Consortium of Investigative Journalists (ICIJ) is leading the investigation and has shared these files with over 600 journalists across the world in the biggest journalistic collaboration in history.

The leaked documents mainly consist of Word and PDF files, images and email conversations from 1996 to 2020, and in some instances as far back as the ’70s.

amaBhungane analysed a number of company documents and a trail of email communication beginning in 2013 when the Rautenbach trust fund structure was constituted.

Detailed questions were sent to Green Fuel and to Rautenbach’s personal assistant, but received no response.

Asiaciti explained in its email response that it worked with clients across the world and its services were “subject to stringent regulation by the relevant authorities in each jurisdiction in which we operate”. (See their detailed response below.)

Fifteen years in southern and central Africa

Rautenbach’s controversial reputation flows from allegations that he used his proximity to government leaders to gain favourable access to business opportunities.

The compliance and risk documents seen by amaBhungane show that Asiaciti consistently rated the family’s trust fund structure as “high risk” – primarily due to Rautenbach’s status as a politically exposed person (PEP), his influence in Zimbabwe, the negative reports around his businesses and the substantial debt exposure the fund had to his businesses.

He spent the period between 1999 and 2009 as a fugitive from South Africa after he fled the country when he was charged with corruption and customs tax fraud.

His company, SA Botswana Hauliers (Sabot) would later pay a fine of R40-million but Rautenbach never admitted any personal liability and charges against him were withdrawn as part of the 2009 settlement.

Rautenbach’s controversial ties to leaders of former Zimbabwean President Robert Mugabe’s Zanu-PF regime eventually landed him on the United States and European Union sanctions list in 2008.

The US called him one of Mugabe’s “cronies” and accused him of providing “support to senior regime officials during Zimbabwe’s intervention in the Democratic Republic of the Congo”.

Both Noon and Rautenbach submitted letters to Asiaciti declaring the source of funds for the assets which would be placed in the trust.

 

In his letter, Rautenbach states the family’s wealth was a result of “financing and equity investments I have made over the past 15 years in southern and central Africa, mostly Zimbabwe”.

“The origin of the capital used to finance and develop these activities stems from the original family transport and logistics business Sabot, as well as from the mining operations in the DRC which were sold to the AIM listed Central African Mining and Exploration Company Plc (Camec) in 2006, in exchange for cash and shares”.

Camec was sold to Eurasian Natural Resources Corporation (ENRC) in 2009 and, while Rautenbach was under sanctions, it is reported that he made an estimated $50-million from the sale.

Motivating the transfer of assets to his wife in 2013, Rautenbach wrote: “This donation was made in order to compensate for the effects of the default marital regime under which we were married in 1984 and which today does not reflect or adequately provide for all the support and hard work she has contributed over the years to help growing our investments”.

Documents show that Noon, who in one email was described as a “lady who has more of an ‘old style Europe’ family wealth background”, also transferred her own “traditional family wealth” into the trust structure – but the main assets were loans Rautenbach made to his businesses, the most significant chunk flowing to Green Fuel.

Green Fuel is a biofuel company that produces ethanol from sugarcane

It’s owned by Rautenbach’s Rating Investments and Macdom Investments in partnership with the Zimbabwean state’s Agricultural and Rural Development Authority which pledged the use of its land leases where Green Fuel operates in exchange for a 10% stake in the company.

Zimbabwe introduced mandatory blending of all fuel with ethanol in 2011, a policy which created a monopoly for Green Fuel which until 2019 was the only licensed company that could supply ethanol for blending.

Rautenbach has been accused of paying government and Zanu-PF officials to maintain Green Fuel’s dominance and increase the percentage of ethanol blend because, as the company’s leaked financial documents show, this was critical for the plant’s sustainability.

He did not respond to amaBhungane’s questions about this, but has previously branded his most vocal accuser, former Zanu-PF fixer Temba Mliswa, as “an extortionist”.

Over the years the percentage of ethanol that must be blended with fuel has increased and is now set at 20%.

Pandora’s box

It is against this backdrop of alleged cronyism and corruption that Asiaciti agreed to administer the private family trust fund even before Rautenbach’s sanctions were fully lifted.

While Rautenbach was removed from the EU and United Kingdom sanctions list in February 2012, the US and Isle of Man only lifted theirs in April 2014 and July 2014 respectively.

In an initial client review form dated May 2013, Asiaciti states that the firm sought legal advice from a “US law firm” on the implications of Rautenbach’s US sanctions and they confirmed Asiaciti’s “ability to act”.

Asiaciti is a trust specialist firm that offers “wealth structuring and asset preservation” services for ultra-wealthy individuals and their families. The company is headquartered in Singapore and also has offices in low tax jurisdictions such as the Cook Islands, Nevis, Panama and Samoa.

While it is not illegal for wealthy individuals or corporations to hold assets for succession planning in offshore trusts, a recent report by the Organisation for Economic Co-operation and Development (OECD) on the enablers of tax and white-collar crime notes that trusts and other offshore structures can be misused to obscure beneficial ownership through complicated ownership layers often in several jurisdictions.

This reality is demonstrated in ICIJ’s previous investigations such as the Paradise Papers and Panama Papers that have unearthed how wealthy individuals, world leaders and corporations – aided by major banks, legal firms and asset management companies – have exploited murky offshore structures to launder money, circumvent sanctions and dodge taxes.

Enforcer

Asciaciti did not respond to specific questions sent by amaBhungane, including a question on why it engaged the family while Rautenbach was under sanctions.

Even though Noon was the settlor (the person who transferred the assets into the fund), the leaked documents reveal that Asiaciti’s administrators identified Rautenbach as the “effective controller… from the onset due to his donation of assets to his wife”.

A 2017 risk PEP form says that he “continues to have significant influence in the structure”.

The structure is made up of a family trust called the Bonsai Business Trust in Singapore, which holds the White Orchid Fund, a private family investment fund listed on the Singapore Exchange (SGX).

The layer under the fund consists of holding companies in Hong Kong, the British Virgin Islands and the Bahamas through which loans flow to Rautenbach’s Zimbabwe businesses.

At the top of the pyramid is the Blaze Purpose Trust which is the ultimate family ownership structure set up in the Cook Islands, a notorious trust destination favoured by those who want to protect their assets from litigation.

The sole enforcer and ultimate beneficial owner of the Blaze Purpose Trust is none other than Rautenbach, represented by his corporate alter ego Kogo Universal Holdings.

In other words, there is a convoluted line of control starting with Rautenbach’s Kogo Holdings and ending with loans to, and equity investments in, operational Zimbabwean companies, among other things.

These assets were primarily made up of debt funding that had been extended to around five SPVs in the Bahamas and British Virgin Islands. Namely: Elloway, Jefton, Marigold, Lostworld and Bartlow who were intermediary lenders to Rautenbach’s Zimbabwe companies: Green Fuel, Zim-Bio Energy, Ratings Investments, Clidder and Macdom Investments.

Buried in debt

The primary debt that the White Orchid Fund holds in Rautenbach’s businesses amounts to approximately $120-million, with the greatest exposure being to Green Fuel.

But it is not clear how much of an asset those loans really are.

At the time the loans were placed in the fund in 2015 they were all in default and in 2016 auditors assigned them a net-asset value of just under $20-million; by December 2018 this value was registered by Asiaciti at around $18-million.

A look at Green Fuel’s financial statements at the time (drawn from the leaks) shows that the company was making substantial losses and its future prospects were being buried under the weight of the debt.

In 2016, the company’s auditors raised concern about its ability to continue as a going concern due to it suffering $12,8-million losses in that financial year and its current liabilities exceeding current assets by $229-million.

The bulk of the liabilities stemmed from interest-bearing loans which Rautenbach made to himself at interest rates of between 8% to 20% per annum.

At least four companies, which are a part of the trust fund structure and can be linked to Rautenbach, accounted for $173-million of the $186-million debt which was due for repayment.

The debt, however, seems to be highly discretionary.

In a 2015 email thread where the payment projections of the structure are mentioned, one of the administrators says, “As per the loan agreements there is complete possibility left to the debtors to voluntarily pay accrued interest and principal during the term of the loan, but they are under no obligation to – which is why the management of the companies may decide to vary at will their payment schedule.”

In the end, the fact that “major financiers to the project continue to provide support by extending the loan repayment periods” is listed as one of the mitigating factors to Green Fuel being classified as a going concern by its auditors.

Just as important was the ethanol monopoly.

The company admits that this is central to its future prospects stating that its dismal financial performance and cash crunch are due to the delays in government implementing the mandatory blending policy introduced in 2011 but only gazetted in 2013.

“In light of the fact that the company is the only registered licensee for mandatory blending, such mandatory blending policy mitigates against any current material uncertainties and reaffirms that the C company will be financially viable going forward,” the 2016 financials read.

During a 2016 trip to Green Fuel’s operations in Zimbabwe, the Rautenbachs placed the blame for the company’s financial challenges on the “disastrous economic policies” of the government and the liquidity crisis the country was facing.

“They confirmed [Green Fuel] had been continuing to lobby the central bank very hard in relation to allowing them to make US dollar payments on the loans outstanding as ‘operationally essential funding’ but so far, have not succeeded,” wrote one of the administrators in a file note.

Meanwhile, the Zimbabwean state – which has the option of increasing its shareholding to 51% of the business [according to a parliamentary committee report] – will have to wait for that mountain of debt to be cleared before expecting any return on its contribution into the joint venture, particularly the extensive land holdings it has provided for cane production.

For the Rautenbachs, the proceeds from the loans are meant to be  “temporary investments to seed the [WOF], providing the capital for the making of actual private equity investments which will be in line with the fund’s investment objectives”.

Which is what administrators told the SGX when the fund was applying to be listed.

High Risk

In general the loan agreements – at very high interest rates – appear designed to strip cash, alternatively equity, out of the operating companies, effectively rendering operators, other creditors and minority shareholders completely hostage to Rautenbach’s offshore interests.

At the same time the prospects for the family to cash in appear to depend heavily on Rautenbach’s ability to retain political support in the tottering Zimbabwean regime.

For instance, a 2014 report by the portfolio Committee on Youth, Indigenisation and Economic Empowerment noted that Green Fuel was given a blending licence despite not fulfilling the 51/49% ownership split as was stated in the country’s indigenisation laws.

(The Agricultural and Rural Development Authority, has an irrevocable option to acquire up to 51% shareholding, but the company’s debt burden must act as a significant disincentive.)

Green Fuel also depends on a favourable ethanol pricing regime, set by the Zimbabwe Energy and Regulatory Authority.

In addition, an improvement in Green Fuel’s performance and likelihood of future profitability is also highly dependent on being able to expand its harvestable sugarcane so that the plant can operate at its installed 100-million litre capacity: in other words, getting access to more land.

Will Billy’s bet succeed? Or will the White Orchid whither?

Time will tell.

Asiaciti responds

Asiaciti explained in an email response that it worked with clients across the world and its services were “subject to stringent regulation by the relevant authorities in each jurisdiction in which we operate”.

“We maintain a strong compliance programme and each of our offices have passed third-party audits for anti-money laundering and counter-financing of terrorism practices in recent years.

“However, no compliance programme is infallible – and when an issue is identified, we take necessary steps with regard to the client engagement and make the appropriate notifications to regulatory agencies,” it said.

Asiaciti further stated that the information amaBhungane presented regarding the establishment of the Rautenbach trust fund structure “had many inaccuracies and instances where important details were missing” but did not clarify what those were.

DMaverick

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Special Report

Why Rwanda Beats Uganda In Espionage Games

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On October 1, 1990, Maj. Gen. Fred Rwigyema, a Rwandan refugee serving in the Uganda army, led thousands of fellow Rwandan refugees across the border to topple the government in Rwanda.

”We have been attacked, and we have not identified the invaders yet,” Colonel Rusatira of Rwanda Defense Ministry told Radio France International three days after the attack on Kagitumba Border. ”All we know is that they are wearing uniforms looking like those of the Ugandan army.”

A communique issued by Kampala condemned this act by refugees saying, “The escape and re-entry into Rwanda was done without our knowledge or support.”

The escape of refugees was a climax of years of their careful and clandestine mobilisation, and training. The Rwandan refugees had for years suffered under previous regimes in Uganda. Because of their torture, humiliation and denial of inaleanable human rights, the refugees had learned the benefits of surviving clandestinely.

Infact when Mr. Yoweri Museveni rebelled against his boss President Apollo Milton Obote, the Rwandan refugees saw a loophole and chance to advance their decades long held plans of returning home.

The Rwandan refugees joined Museveni’s Resistance movement armed wing of course as the easiest means of gaining realtime war theatre experience that would later be instrumental in launching a protracted armed struggle against the racist regime in their motherland.

After the Rwandan refugees helped bring President Museveni to power, Gen. Rwigyema had risen in ranks as once deputy commander of the National Resistance Army and later deputy defense minister. Such military operation and leadership skills coupled with excellent ideological orientation and a shared objective among the Rwandan refugees was enough to facilitate their return back home.

Indeed the first test of the refugees’ level of excellence was the element of surprise on the day of invasion.

President Yoweri Museveni of Uganda and President Juvenal Habyarimana of Rwanda were away in New York for the conference on children.

This desertion of excellent warriors of Rwandan origin in the National Resistance Army has always given sleepless nights to Museveni and held nearly all Rwandans with suspicion.

These former Rwandan refugees sucessfully toppled the Habyarimana regime in Kigali in 1994 and single handedly ended a genocide against Tutsi that claimed over a million lives.

Rwanda has been restored to a functional and progressive state with an enviable position in various global rankings and this triggers more envy from Rwanda’s northern neighbour.

According to analysts of Relations between Kampala and Kigali for the past 27 years, Kampala has always wanted to prove it is superior and that it could influence internal functioning of the regime in Kigali.

Through numerous attempts, Kampala has not grown past petty old school squabbles against the Kigali leadership.

The Uganda government now facilitates anti Rwandan elements, possibly dreaming of toppling Kigali. However, Kigali has grown its capabilities in nearly all fronts and can take on challenges both home and abroad.

Closing Gatuna, Kagitumba Borders

Repeated torture and humiliation of Rwandans legally living in Uganda forced Rwanda to close its borders and protect its citizens from harms way since March 2019.

The Kampala regime which has lost touch with Kigali believes that any Rwandan on Uganda territory must be a source of valuable information on Kigali- the reason many Rwandans are rounded up in a non selective manner, tortured and detained. Kampala thinks at least every Rwandan must be on a spy mission in Uganda.

In March 2018, President Museveni refused to attend the African Continental Free Trade Area Treaty meeting in Kigali. Three days after the meeting, President Paul Kagame flew to Kampala with a delegation to meet Museveni for discussions.

During a joint press conference Museveni was tasked to explain the harassment against Rwandans in Uganda. “I think there needs to be close cooperation between intelligence services,” he said.

“There is no fundamental conflict between Rwanda and Uganda,” Museveni said.

However, Museveni still maintains a bullyish attitude towards Kigali and heaps blame on Kigali for the frosty relations between the two countries despite attempts of mediated talks to normalise relations.

In a recent interview with foreign press, President Museveni was pressed to explain the border closure politics.

President Museveni has blamed President Paul Kagame of Rwanda for shutting the border two years ago.

Museveni denied claims by Kagame that he was acting like the master of the region and a bully.

On Rwanda Spying on Uganda, he laughed it off saying the secrets are in his head therefore their effort is a waste of time.

In a July Interview with Financial Times, President Kagame was also tasked to explain espionage claims.

President Kagame was asked to respond specifically to allegations of spying on Ugandan officials.

“Our country, like any other country, does intelligence. In fact they even monitor people’s communication. For us to know our enemies and what they do wherever they are is something we have always tried to do within our rights like it is in the rights of all the countries we know in this world,” Kagame said.

He added, “of course there are rules that govern all these things we do. Probably more things happen discreetly than those that happen in the open. That is why some people will pretend and accuse people of doing certain things that they do even more than the people they are accusing.”

“We have done intelligence and we are going to do it for the future because that is how countries operate,” Kagame said.

“I don’t think Rwanda would be an exception. That is how we get to know about our enemies and those that support our enemies. We know a lot about them but we use mainly human intelligence. We are very good at that for your information. We really do a good job of that,” Kagame told the FInancial Times Journalist.

When Museveni and Kagame Meet, Our Theories Become Useless

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