Natural Resources and Violent Conflict - WaterWiki.net

202 winer and roulewar, the country continued to have access to international banks, bothfrom local offices of major banks and from local banks that maintainedcorrespondent accounts with major banks. With control of coltan, it islogical that rebel armies would repatriate excess funds to their homecountries. Indeed, reports by both nongovernmental organizations operatingin the Democratic Republic of Congo and the UN expert panellink neighboring officials with profiteering and suggest that they usedbanks in neighboring countries to handle the funds (see “Four CompaniesNamed” 2000; UN Security Council 2000). Regional financial institutionsalso remained engaged in the Democratic Republic of Congothroughout the conflict, and some profited directly from it.The Democratic Republic of Congo has no functioning governmentin the coltan-extracting areas. It is not surprising that the various militaryforces that controlled the mining areas applied no regulatory orenforcement measures except the use of force against their enemies.Regulatory or enforcement action would be possible only if the country’sneighbors were to undertake such action. Instead, the neighborssought to profit from the civil war. In general, these countries havepoor regulation and enforcement of money laundering laws. The failureis one of both political will and institutional capacity.Given the ongoing conflict, the Democratic Republic of Congo failsto meet the most rudimentary international anti–money launderingnorms. Regulatory and enforcement gaps include the following:• No meaningful measures by financial institutions to obtain informationabout the true identity of the persons on whose behalf anaccount is opened or a transaction conducted• No requirements to report suspicious transactions• No programs in financial institutions against money laundering,such as internal policies, procedures, and controls, or screening proceduresto ensure high standards when hiring employees• No measures to detect or monitor the physical cross-bordertransportation of cash and bearer negotiable instruments• No laws banning the use of anonymous accounts or accounts inobviously fictitious names• No barriers in practice to the laundering of funds by essentiallyany person for any purpose, other than the logistical barrier of placingfunds in a banking system that is still based largely on outdated practicesand technologies.In 2002 the International Monetary Fund announced a program oftechnical assistance for the Democratic Republic of Congo, whichincludes reforms to the banking sector. Regardless of such reforms, theexercise of control over coltan mines by foreign security and rebel forces