Zitto Kabwe's Private Motion to Investigate & Recover Money Stashed in Swiss Accounts
STATEMENT BY KIGOMA NORTH MEMBER OF PARLIAMENT, ZITTO ZUBERI
KABWE, PRESENTED IN THE NATIONAL ASSEMBLY ON THURSDAY NOVEMBER 8
WHILE MOVING A PRIVATE MOTION TO PROPOSE THE FORMATION OF A
PARLIAMENTARY PROBE COMMITTEE TO INVESTIGATE INFLUENTIAL
TANZANIANS WHO HAVE UNLAWFULLY STASHED MONEY AND PROPERTIES IN
SWISS BANKS AND OTHER FOREIGN COUNTRIES
(Under Rule 54 (1) and (2) of Parliamentary Standing Orders)
INTRODUCTION:
Honourable Speaker,
On November 2, 2012, I submitted a letter, describing my intention of presenting a private motion on
the above mentioned subject. The objective of this private motion is to urge the Government of the
United Republic of Tanzania to contact the World Bank Institute – through its Stolen Assets Recovery
Initiative – to bring back dirty money stashed by Tanzanians in various banks in Switzerland.
Having shown my intention, your office requested me to bring the details of my motion so it could get
a space on Parliamentary timetable and having brought the details, your office has given me the time
to present this motion before your Parliament.
With due respect, I now present before your Parliament, this very important argument that seeks to
make sure that our nation closes loopholes for corruption and especially the hoarding of Tanzania’s
much-needed foreign currency in foreign banks.
Honourable Speaker,
In June 2012, the Central Bank of Switzerland (National Bank of Switzerland) issued a public
statement about citizens of various nations who hold various guarantees with various banks in that
country. The Bank had announced that the sum of U.S. $ 196 million (one hundred million ninety-six
dollars) were deposited in various bank accounts in that country and that the funds are owned by
citizens of Tanzania. This money amounts to more than 314 billion shillings (three hundred fourteen
billion shillings) under the current exchange rate.
Honourable Speaker, The conversation I had last night with my personal investigators has added
new information that reinforces my argument. First, the amount of money owned by Tanzanians in
Swiss banks alone is roughly 20 times the amount that was announced by the National Bank of
Switzerland. For example, UBS Bank alone has 240 officers involved with Tanzania alone. Every
officer manages a Tanzanian client who owns not less than U.S. $ 10 million in Swiss banks.
The above mentioned figure is only part of the money that Tanzanians hide in various banks abroad.
The figure does not, however, include funds Tanzanians have stashed in other countries like Jersey
Islands, Mauritius and the Cayman Islands. It is difficult to get actual figures from other countries
because they do not follow the practice of releasing such information in the way that Switzerland has
done this year.
Honourable Speaker,
The Guardian On Sunday Newspaper in its June 23, 2012 issue quoted the Director General of the
Prevention and Combating of Corruption Bureau (PCCB), Mr Edward Hoseah as saying that on
Monday, June 24, 2012, he would write to the Swiss authorities, requesting with the names of
Tanzanian citizens who have money in the mentioned Swiss bank accounts. However, to date,
Tanzanians have not been told whether or not the letter was really written and the subsequent
response. PCCB is the only entity in Tanzania that is legally authorized and mandated with the task of
getting to the bottom of the truth of this matter. It is the only legal entity that can bring to us the list of
names of Tanzanians, including the 'Politically Exposed Persons' like Members of Parliament,
Ministers and other senior government leaders who own these billions in off-shore accounts.
Honourable Speaker, various countries have used different methods to ensure that their countries’
money that was once stashed by certain individuals in off-shore accounts is brought back home. U.S.
and Germany decided to buy CDs from former employees of different commercial banks in
Switzerland. They managed to discover names of their citizens who hid money in foreign countries
and decided to charge tax on the funds as a way of getting their money back. Germany decided to get
into an Information-sharing Agreement with Switzerland and imposed tax on the amount. Even as the
tax treaty has not yet been endorsed by the German Parliament – Bundesrat – the main opposition
party in that country, SPD, has purchased CDs containing names of Germans who hold savings
accounts in foreign countries.
Recently, one Greek newspaper published a list of Greeks who have hidden money in Switzerland.
This list is based on the list that former France Finance Minister, Christine Lagarde presented to the
Government of Greece but unfortunately, the latter took no action.
Honourable Speaker,
In short, since the National Bank of Switzerland announced the amount of money stashed by
Tanzanians in Swiss banks, the Government has not taken any action meant to ensure that this issue
isthoroughly investigated and that appropriate action is taken against those that hid the money there.
The government has done virtually nothing to make sure that the stolen money is brought back home
so it can be used to develop our nation. It should be noted that there are some Tanzanians who hold
savings accounts in foreign countries but who obtained their money legitimately after conducting
various commercial activities. At the same time, there are some Tanzanians who hold such accounts
after obtaining the money through corrupt means. A thorough investigation is important because it
will serve to establish which money was obtained lawfully and which one was obtained
Consequently, a thorough investigation will help to understand whether people owning money
legitimately in off-shore accounts followed correct legal procedures that Tanzanians, willing to save
foreign currency in foreign countries, need to follow. The fact that the government has remained quiet
even as this important information comes to light, indicates two things: It is either that the government
is too weak to make a serious decision or that those that are entrusted with the mandate of taking
action against such malpractices are the very same people who are also partners of the individuals that
stash our money in foreign banks.
Honourable Speaker,
Before going into detail on the two main sources of funds for Tanzania nationals holding cash and
assets in foreign countries, allow me to say that people are opening accounts abroad, or owning
property abroad for two main reasons: The first reason is that they hide illicit funds obtained through
illegal means and the second is that they evade tax. The first method is used by politicians and
government officials (Politically Exposed Personalities - PEPs) and the other is used by big
businesspersons, especially businesses that sell goods abroad. Thus, a move to take action against
these groups will be a clear indication of how serious we are in preventing corruption. It will also
show corrupt people that they have nowhere to hide. It will also increase government revenues by
ensuring that all citizens pay tax as appropriate.
Investigating source of funds
Honourable Speaker,
According to a 2008 report by Global Financial Integrity (GFI), a total of U.S. $ 8 billion (eight
billion dollars) was siphoned out of Tanzania between 1970 a 2008. Going by the current exchange
rate, this amount is equivalent to TZS 13 (thirteen trillion Tanzanian shillings). Tanzania’s National
Debt between 1961 and July 2012 stood at ten billion dollars. This means if this money, swindled
over a period of 38 years, could be recovered, we would be in a position to repay eighty percent of
the national debt. In 2012/2013 the Parliament endorsed a total of 1.9 trillion shillings for debt
repayment. This issue is a challenge to African countries where billions of funds are swindled each
year in a well orchestrated partnership between corrupt leaders and unscrupulous businesspersons,
leaving the continent grappling with abject poverty.
Honourable Speaker,
Part of these illicits funds come from corruption, while some of it originates from tax evasion and the
third part comes from the amount that the Government got as loans from abroad of which a large part
of the debt remained there yet Tanzanians pay debts. However, money stashed through corrupt means
and tax evasion is much more than what the government got in as loans.
Honourable Speaker,
For example, between the years 2003 - 2005 a number of corrupt deals took place at the Bank of
Tanzania and a staggering 155 billion shillings was paid from the Bank of Tanzania to Nedbank Bank
of South Africa as the payment of a loan that the Government guaranteed for the Meremeta Gold
Mining Project. These funds were fifteen times more than the actual loan which the government had
guaranteed. Our investigation shows that 70 percent of these funds ended in the bank accounts of
various individuals in Switzerland via Mauritius.
Honourable Speaker,
Meremeta Company.was later renamed TanGold, was specifically established for the sole purpose of
swindling billions of money away from the country, with the close involvement of the government. I
submit to your August House, a letter from the State House in the President’s Office dated August 20,
2001, with reference number SHC/M.100/4/A to a Deutsche Bank branch in England. The letter was
meant to introduce Meremeta and a South African firm, Nedcor Trade Services Limited, so the two
could get a credit guaranteed by the Government of Tanzania. The letter identifies two gold projects
(Tembo and Buhemba Gold Mines) as projects under the Ministry of Defence and National Service. It
was that letter that opened a wide network of theft of Tanzania’s money to South Africa and Mauritius
before getting into off-shore accounts in Switzerland and other notorious tax havens. Following this
State House letter, a ten million dollars loan was obtained. However, the Government of Tanzania
through the Bank of Tanzania paid Nedbank Bank a total of U.S. $ 138 million, ten million of these
were disbursed through the Deep Green Finance company.
Honourable Speaker, I made a personal investigation into this issue. I tried to contact Nedbank,
seeking to determine who benefited from this great and historical theft of public money in this
country. This investigation continues and the information I have collected so far shows how our
fellow Tanzanians, entrusted with the mandate of running this country, are utilising public funds to
their advantage. All documents I collected in the process will be presented to a Parliamentary Probe
Committee which I propose should be established to look into this issue.
Honourable Speaker, I hve gathered documents relating to national security in the process to
investigate these scandals and I would also like to show them to the committee that I propose should
be formed. I hve collected documents that show various types of weapons and where were they
procured from and in whose hands they ended into. I've noticed that openly said, these issues stand a
chance of jeopardizing the safety of our country. However, something must be done so that
government officials who were involved in the process could be brought to book should they be found
guilty of the offences.
Honourable Speaker, the funds swindled through Meremeta Gold Company and Deep Green
Company landed in individuals’ accounts abroad. However, soon after the creation of the company
TanGold, a total of ten million dollars was put into the company’s account at NBC Bank, Corporate
Branch. I will also provide the account number to the parliamentary probe committee which I pray
should be formed.
Honourable Speaker,
In 2004, 2006 and 2007 Tanzania issued oil and gas exploration contracts in various parts of the
country. Our findings indicate that more than 56 million dollars was paid to individual accounts in
Switzerland from the companies that won the oil and gas exploration tenders.
Honourable Speaker,
I conducted investigations, and with the help of investigators specializing in issues pertaining to
international financial systems, I managed to get the necessary documents that show how Tanzanians
got their money and stashed them in off-shore accounts.
Honourable Speaker, in 2004 and 2005 a South African politician and a member of the ANC, Mr
Tokyo Sexwale made a business tour to Tanzania. He brought with him two of his friends and the
three decided to set up what came to be known as Ophir Energy Tanzania Limited. This company
owns three exploration blocks off the coast of the Indian Ocean blocks 1,3 and 4. Mr Tokyo Sexwale
was introduced in the country by a Congolese Citizen by the name of Moto Mabanga who was the
‘Deal Maker’. Currently, Moto Mabanga has sued Ophir Energy for what is described as the latter’s
failure to abiding by their contractual agreement when the Congolese successfully connected Ophir to
Tanzanians authorities. A number of government officials and corrupt politicians were heavily bribed
by Moto Mabanga in the process to strike a deal that saw Ophir getting the three blocks. Upon
completion of the deals, Ophir decided to allocate some shares in the company to individuals to be
held on behalf of Chama Cha Mapinduzi.
However, our investigation shows that these shares were held on the individuals’ behalf and these
shares have now been sold and the money has been stashed in various banks outside Tanzania.
It is imperative to investigate the ownership of Ophir Energy during the early days of the company’s
entry into Tanzania as well as the change in ownership during the past eight years of the company’s
presence in Tanzania. Similarly, there should be a serious screening of oil and gas exploration blocks
that were issued between 2003 and 2008 as well as the shares owned by Tanzanians in these foreign
oil and gas exploration firms.
Honourable Speaker, your esteemed parliament should order the government to use both public and
private investigators to get detailed information on these issues. Being a Member of Parliament, I
have done my part and having reached this stage, I now need the help of the entire parliament and my
duty remains that of providing the Parliamentary Probe Committee (that I pray should be formed)
with all the information, documents and institutions that will help the committee in arriving at the
bottom of this matter.
With this explanation, I now beg to submit:
A PRIVATE MOTION BY ZITTO ZUBERI KABWE (MP), SEEKING THE PARLIAMENT
TO MONITOR AND DIRECT THE GOVERNMENT TO TAKE ACTION AGAINST
TANZANIAN CITIZENS WHO HAVE UNLAWFULLY STASHED FUNDS AND
PROPERTY OUTSIDE THE COUNTRY
(In line with Regulation 54 (3))
WHEREAS there has been confirmation from Swiss authorities that there are Tanzanian citizens who
hold foreign currency in banks in that country and that there are rules and procedures to be followed
by Tanzanians in the process of opening of accounts of foreign exchange out of Tanzania by resident
Tanzanians. And that the opening and operating of accounts worth billions of shillings in foreign
countries may be against Tanzania’s own FOREIGN EXCHANGE ACT, 1992
AND WHEREAS Section (10) of the Foreign Exchange Act prohibits the transfer of Tanzanian
currency from the country without the approval the Governor of the Central Bank. And since the Act
explains that a Tanzanian, willing to travel abroad is not allowed to have with him shillings the value
of which exceeds fifty dollars. Also pursuant to that Act, Section 6 and 7 to the document issued by
the Governor of the Bank that any Tanzanian who want to open accounts in banks outside of Tanzania
must obtain approval of the Governor,
AND WHEREAS the provisions of this law may have been violated by those involved in the stashing
of these funds in foreign currency in foreign banks,
AND WHEREAS it is apparent v that money placed in foreign banks was largely obtained
illegitimately and that there is a strong possibility that the funds were obtained by tax evasion.
AND WHEREAS, our country has a serious foreign exchange constraints, which has resulted in the
depreciation of our currency against other major currencies as a way of offsetting the cost of
procurement of goods abroad,
AND NOW, THEREFORE, I asked this House to resolve to:
1. Form a Parliamentary Probe Committee to investigate Tanzanian citizens who hold foreign
currency and assets outside of the country. The Select Committee should do the following:
Examine the entire system through which money is swindled and hidden in bank accounts abroad,
Investigate, analyse and draw a clear distinction between property and money, owned by Tanzanians
legitimately and illegitimately, in foreign bank accounts.
Examine the whole process of allocating blocks of oil and gas exploration between 2003 to 2008,
Examine the entire flow of funds from the Bank of Tanzania through Meremeta Company (also
Triannex pty South Africa and Deep Green Finance ltd) and recommend measures against all
perpetrators of this corruption scandal.
Investigate the ownership structure and the involvement of Tanzanians in all oil and gas exploration
companies during the time of issuing exploration licenses and how the the ownership structure has
changed during the past few years. The income proceeds from this change and tax accrued as a result
of these changes should also be investigated.
Examine in detail properties of all Tanzanians who once held positions of Prime Minister from 2003
until 2010; who once held positions of Minister of Energy and Minerals, Minister of Defence, the
Chief of Defence Forces, Permanent Secretaries in the Ministry of Minerals and Energy, Permanent
Secretaries in the Ministry of Defence, Attornies General, Commissioners for Energy, Directorate
General of TPDC, Chairman and Members of the Board of TPDC in between 2003 and 2010.
2. That government should bring a bill to Parliament at the 11th Meeting of the National Assembly
that seeks to prohibit any leader holding public office, her husband or his wife or his children from
holding off-shore bank accounts, except for specific reasons and with official approval from the
President of United Republic of Tanzania.
3. That the government communicates with the World Bank’s Stolen Assets Recovery
Initiative(StAR) so that these billions and properties, illegally owned by Tanzanians in banks in
Switzerland, Dubai, Mauritius and other havens as well as in all areas where the country’s money may
have been hidden, to be brought back to Tanzania immediately
4. That in the bill mentioned above, the Governor of the Bank of Tanzania should strengthen its
authorities in issuance of permits for the Tanzanians willing to open accounts abroad and that each
year the Governor will announce in the Government Gazette and in high circulation daily newspapers
the names of people who applied and were allowed to have a bank account outside the country.
5. That all Tanzanians, with foreign bank accounts, should explain how they obtained the money
stashed in their accounts there and for those that will fail to explain. PCCB should take legal action
against all those who possess money and property incommensurate with their legitimate income.
6. That during the 11th Seating of National Assembly), and after the report of the Parliamentary Probe
Committee on Tanzanians holding bank accounts abroad, the Government should tell this parliament
the steps that it has taken to plug the corruption holes surrounding money stashed in bank accounts
abroad.
7. That the Government in its 2013/14 budget should establish a special tax 'Financial Transaction
Tax' of at least 0.5 percent of the value of the 'transaction' in order to be sure of the financial records
within and from outside the country.
Honourable Speaker,
I beg to move,
.
Kabwe Zuberi ZITTO (MP)
Constituency-KIGOMA NORTH
08.11.2012
No comments:
Post a Comment