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Saturday, March 30, 2013

Rhodesian Sanctions: Keeping the holds and tanks empty . . .

1.     PLUTO, the Dutch Anti Apartheid Movement and Rhodesia
PLUTO, what Breyten called a “revolutionary action group” catalysed during the student uprising at the University of Amsterdam in 1969, much the same as had been the case with ATLAS in Paris a year earlier. PLUTO spawned the Dutch Anti Apartheid Movement (AABN), a fully-fledged national movement in the Netherlands. Within PLUTO a position on sanctions as a form of revolutionary solidarity never had enthusiastic support. But once faced by the expedience of leading a major solidarity group, sanctions was taken on with a vehemence not witnessed before, either internationally, with other Anti Apartheid Movements, or with Governments, Commonwealth and other international organizations. 

Aid and trade with the decolonised countries was important in the adopted strategy. In the late sixties / early seventies aid was seen by revolutionary militants as creating debt bondage and tied trade with the poor world to the benefit of the rich. What was interest-free Marshal Aid for the reconstruction of a war torn Europe, became repayable loans for the ex-colonial countries. Eventually these “aid receiving” countries were exporting capital to the rich countries as debt repayments exceeded further aid. “Busting sanctions busters” gave ample opportunity to expose these hypocrisies. The US, for example, made a special exception in its sanctions program to exclude chrome exports from Rhodesia, but at the same time raking in debt repaments plus interest from poor world countries. 

With these objectives in mind the AABN opted for a very different strategy followed and propagated by other groups. With most AAMs sanctions actions were based on consumer boycotts, media and diplomatic action. The AABN, on the other hand, embarked on working primarily through trade unions. The methods employed involved low key intelligence backed up by research.   
A task team was assembled made up mainly of the members of the Rhodesia Committee that had disbanded and its members thrown their lot in with the AABN. Because of the legal complexity we had an Attorney and an Advocate in the team as well. Of great benefit were the militants who came from the Rhodesia Committee. They were all students from the Technical High School. The team was strengthened considerably by their ingenuity and bold approaches: street wise savvy in tracing information, like gaining access to buildings, and work with telex machines.

By late 1971 the team was ready for action. There were regular meetings once per week, even though during the first months a plan of action had to be devised with little or no progress to report on. It was by steadfast determination that a way was found, and the team gained practical traction in enveloping some sanctions busters. The team stuck to simple logistics. If sanctions busting was taking place, then there must be paper chases to follow in the world of banking. The team’s Attorney, who was research smart, started looking at official statistic with the Nederlandsche Bank (Dutch Reserve Bank) and came back with a result – yes, there were Rhodesian Dollars held on the reserve accounts of the Bank. The amounts were small, but it was a definite indication that these small amounts were merely the tip of the iceberg.     

Requesting details from the Nederlandsche Bank fell on deaf ears. Writing official letters also helped nothing. We called on the Economische Controle Dienst (ECD, “Economic Intelligence Service”) also to no avail. It was clear to us that without political support at high level there was no way for the team to make any progress. 

Not to be put out by these first negative responses to what we considered clear evidence of illicit trade, we called for a meeting with the ECD. The ECD conceded a meeting that was held in the attic of the Anne Frank House. They made it clear to us that the fact that we found illicit currency on the books of the Nederlandsche Bank was no proof at all. We had to produce much harder evidence for the ECD to work with and start an investigation. This phrase became one of derision, “hard enough proof to start investigating” or, "there is evidence but no proof". Crime in the commercial world clearly had a tolerance not afforded to the normal citizen who could get picked up for not paying parking tickets!

Note that this meeting was not done as a favour to us by the ECD. It was clear to us that the publicity surrounding the Bodegraven Action had given a considerable media hype, and probably they were wary that we were onto something and take them by surprise, if not in the press but confront them directly with embarrassing information. But at least contacts had been established as well as a modus operandi to work with. The next step was to think hard about how to access the “hard proof” that the ECD needed. An obvious first step was to continue with the research work as well as intensifying surveillance work in the harbours, where the team’s trade union mates had regular access to bills of lading. After a number of weeks of brain storming, a plan was devised that all members made and inventory of friends or acquaintances they knew who were working in banks. Week after weekly meeting we drew blank until one week it was bingo: a contact had been found. Better still, he could tell the team member that bills of exchange had passed his desk relating to sanctions busting. It took a while before he was able to hand over some of the incriminating documents. But the great news was that we had the name of the bank’s client receiving payment for these bills of exchange, Joba Chemicals!!!

With these documents the team again called for a meeting with the ECD. And again the ECD gave not only a negative response, but a threatening one. The information on itself indeed did indicate a financial transaction, but that was by far not strong enough to warrant an investigation. Then the ECD fired a shot over the AABN’s bows with a question: “we need first to investigate how you came in possession of these documents! Meaning the informant’s identity would have to be blown and the source of information dry up.

With this double whammy setback, the fight was on. We knew who the banker was, we not who the actual sanctions buster was: Joba Chemicals in a posh office building a hundred meters from Schiphol airport.

The team at least knew the name of the banker, Bankiers van Lanschot. To the disappointment of the STT van Lanschot was not listed on the stock exchange. By asking around it was established that van Lanschot was one of the oldest and most respected banks in the Netherlands, if not Europe. It only did business with “special customers”. Our informant could tell us that van Lanschot had subsidiaries in a number of countries, Switzerland, Liechtenstein and Jersey Island. While the bill of exchange did make mention of a consignment of children’s toys exported from Japan, through Joba Chemicals as middleman, it was not only an insignificant transaction, but also could legitimately pass through the eye of the law. The UN excluded medical and educational material from sanctions. The fight was on!

2. Joba Chemicals and its role in the sanctions-busting network

The number of the team’s information sources kept swelling. As long as the informant in the bank could be kept in the loop and protected, a steady stream of documents landed with the team for further analysis and investigation. The team also was able to locate the kingpin in the sanctions busting network, with “Etablissement Zephyr” (Zephyr) a shell company working within the official set up of Joba Chemicals. It seems that a lot of thought went into fixing the name for this shell company because of its aptness in meaning “west wind” in Greek. In addition, as most of the business was done by telex, another handy source of information was found as one of the team members had a contact in the central post office in Amsterdam, where all telexes coming and going from the outside world could be monitored. As information was produced, it was puzzled together and dealt with by the team’s attorney to determine its strength to our case to be presented to the ECD.

Garnering information from the office of Joba Chemicals took an own path and soon we had a full in house garbage sorting establishment working night shifts in the basement of the Anne Frank House. A first step was to establish whether taking possession of garbage bags once they were disposed of outside the offices of Joba Chemicals was legal. This the team’s attorney established in the positive. Among the team members there were a few born sleuths who went the extra mile to ensure that everything there was to know, at street level concerning the offices of Joba, were known and monitored. After weeks of visiting the pavement outside the premises to take possession of garbage bags, team members doing surveillance work discovered that these only came out late at night once the owner of the firm ended his late working day. A few garbage bags would be placed on the pavement for municipal collection in the morning, but a few were taken in the boot of his Mercedes Benz.

After surveillance and accessing of full garbage bags, phase two would commence. Working late at night the bags were carefully laid out on a basement table at the Trans National Institute, closely examined and readied for a “post mortem”: thus carefully cut open so as not to lose or displace loose pieces of torn up documents. Matching snippets were then collated and placed in neat little places bags, deodorized, neatly marked by date and numbered, and taken through to the board room table in the basement of the Anne Frank House. Here a team of volunteers, mainly elderly women from church clubs, puzzling the snippets together and patiently gluing together legible documents. These would then be looked at and pinned documents together as complete replicas of single commercial transactions.

Over and above this, and to complete the whole circuit for information gathering, a team member (nicknamed “Key Finger”), was able to gain access to within premises with a special knack for locating telex machines. Old, discarded telex tapes were an invaluable source for information. They were taken through to the offices of a friendly newspaper journalist who reprocessed these through the newspapers telex machine, and literally we were eventually able to shoot transactions down as they were being made and in the sky.

The process was set off as a well-oiled machine. Apart from the “dirty work” being done, this by far the least of the process. The gleaning of clean documents took time to figure out. The documents from the informant often gave links to other institutions, such as Bank Mees en Hope, a bank closely connected to Rhobank in Rhodesia, and decisions had to be taken to concentrate the team’s work to get a legal document ready as soon as we could. And in reality, before the team did get so far, it was working for over a year and in all secured some 8,000 documents. 

There was also the very critical legal analysis that needed to be done. Eventually we found the entire network to be extensive and spread over many countries. Sometimes single transactions were split up and parts of executed in separate countries. This was done in order to get loop holes in separate jurisdictions and these all differed from one another. Financial transactions on themselves were not, for example, a criminal offence in the Netherlands. The team’s advocate was constantly in a spin, receiving sets of documents handed over with grand expectations, only to be told by here that they were flawed in the strict legal sense.

Working for as long as it took, there were windfalls of information which filled in the macro picture apart from the micro details of putting together separate transactions. Interestingly the entire history and business plans of Joba Chemicals could be figured out. The firm was established in 1948 by two friends, Schijveschuurder and Schachter, as a private joint venture. By the early 1960s, prior to the imposition of sanctions on Rhodesia by the UNSC, their firm was prosperous with about 15 people working for it. Before sanctions Joba had an elaborate client structure in independent African countries including Rhodesia. Remarkably its supplier structure had one prominent feature in that it included mainly countries in the East Bloc. Rhodesia and Nigeria were by far the main client countries. The stock lists covering the period 1966 to 1969 made interesting reading.

The imposition of sanctions on Rhodesia in 1966 placed Joba in an unenviable situation. It could have been less greedy and concentrated on chemicals that could pass as “medical materials” and not included under sanctions. Instead, maybe Joba had an ingrained streak for doing illicit trade as it earlier had to appear before a Dutch court for trade with Poland. So, who knows, it went all out to exploit its options in sanctioned Rhodesia. That Joba was in any case aware of what it was doing can be gleaned from the elaborate clandestine international trading network. It could have opted to get out of Rhodesian trade altogether. Instead it chose to make sanctions look foolish!

Joba had a number of advantages going for it. There was, for a start, an elaborate existing network of commercial contacts in Rhodesia. Secondly, it fell under the radar because its ability to remain camouflaged mainly as a supplier of medical material. And last but not least, with its extensive trade with East Bloc countries, and its falling foul of Dutch law in the case of trade with Poland, it had the needed field experience in being inconspicuous and circuitous in trading with suspect countries. While there were other firms with extensive trade with Rhodesia before sanctions, these were highly suspect and easily traceable while trading as they did before sanctions.

Another clear advantage that Joba Chemicals had was that there was a loophole in Dutch law permitting payments for goods trafficking with Rhodesia. It was therefore no surprise that the first move of the team’s legal experts traced these payments at the Nederlandsche Bank. But what was first an advantage for Joba for illicit trade later was cause for its downfall once the AABN released its report and the ECD commenced with its investigations. 

3.     Joba Chemicals at the Centre of the Zephyr Network

A nagging question for the team during its investigations was the question whether we had hold of the centre, or merely the periphery with Joba Chemicals a subsidiary group in a possible huge conspiracy driving illicit trade with Rhodesia. Once the research was complete and we were able to glean over the facts, it was clear that Joba was very much the centre of a well-oiled machine with a number of shell organizations set up as “Zephyr” in a number of countries. On the Rhodesian side the network was relatively secure but yet it was found to be advisable to concentrate trading links in two centres. So we find that all traditional clients of Joba in Rhodesia fall away and are consolidated in one agent, CAPS (Southerton).  A second group concentrating clients of Joba was AROMEX. The team suspected that both CAPS and AROMEX were involved with than one trading company in Europe or elsewhere outside of Rhodesia, but this was not possible to trace. CAPS, as far a Joba Chemicals was concerned, was responsible to trade via Joba for foreign light and heavy industrial chemicals and a small amount of medicals, all traditional Joba trade. The AROMEX group of clients were consistent buyers of a large range of general merchandise, industrial tools and spares. All trade with Joba, also with AROMEX clients, worked through CAPS.   
Zephyr in Amsterdam was registered with the Amsterdam Chamber of Commerce, but was in fact merely a shell company within Joba Chemicals. All Zephyr correspondence was exclusively related to Rhodesian trade. This was the same with other Zephyr shell companies set up in Vaduz, in Liechtenstein, And in Lausanne. Setting Zephyrs in Lausanne and Vaduz no doubt was because of banking secrecy laws in Switzerland and Liechtenstein.

Zephyr shell companies were set up only in cases when there was no alternative. For example in Rhodesia there was no Zephyr, and CAPS and AROMEX became the cornerstones in the overall network within Rhodesia. The same happened in France where a frim with the name of SABAL acted as a support group and acted as a forwarding agent working through the port of Rouen. SABAL in France was set up as a sister group to Zephyr in Amsterdam. SABAL also had an office in Rotterdam.  Goods destined for Rhodesia are handled by SABAL and forwarded to Beira from where local Rhodesian links kicked in. Mostly, however, the goods are forwarded to the well-established SCAC, a French shipping firm. SCAC shipped mainly from Rouen and forwards goods to either Lourenzo Marques or Beira, and then again forwarded to a final intermediary located in both of these Mozambique cities.

Instructions to ship goods invariably came from the Joba office in Amsterdam with explicit reminders that goods “are to be neutralized”, that is that no reference on the packaging should indicate where the goods came from and to where they were ultimately headed in Rhodesia. Under no circumstances are slips allowed whereby either the supplier knows where the goods are going to, or the client can know where the origin of the goods was.

The original tracing of the Zephyr network was marked by trial, error and sheer perseverance. Working with a dedicated team of militants and meeting week-by-week for over a year, there was the final reward of a report was published and immediately followed up by the government.
The report was published in June 1973. However this was merely expedient, we needed to get the report out to get the ECD investigation going. Within a few months the owners of Joba were put on trial, found guilty and had to pay a hefty fine.  

But that was not the end of the sanctions busting saga, far from it. The team found many links between the Banks in the Netherlands linked to Rhobank in Rhodesia which led to a massive exposure of sanctions busting in the tobacco trade a year later. Another offshoot was the link between Rhobank and Mobil Oil, which produced another massive report in the US in 1975, published in Washington in 1976.