Liberia Used Shipping Payments To Buy Arms, U.N. Panel Finds

Staff Reporter of The Wall Street journal


Wednesday, October 24, 2001 (The Wall Street Journal) - The Liberian Corporate & Maritime Shipping Registry of Tysons Corner, Va., has helped Liberia's president, Charles Taylor, procure weapons in violation of a United Nations arms embargo.

The little-noticed role of the world's No. 2 shipping registry, known as LISCR, is detailed in a United Nations report to be presented tomorrow to the U.N.'s sanctions committee. The registry, run and owned by U.S. citizens, is the Liberian government's largest source of revenue.

The maritime aspects of the 135-page report are part of a look at Liberia's compliance with international regulations. The Security Council is to decide next month whether to extend sanctions on arms and diamonds and whether to impose new ones on the country's timber and rubber exports, and registered ships. (The sanctions are aimed at halting Liberia's support for rebels in Sierra Leone.)

The report cites four instances in which LISCR last year made payments to nongovernmental accounts. Two payments, totaling $925,000, were made to San Air General Trading (through a bank in the United Arab Emirates) for arms and transportation "in violation of the sanctions," the report said. In August 2000, following another request from Liberia for nongovernmental payments, LISCR said it would no longer do so.

While the panel that produced the report said the registry "showed a complete lack of due diligence" in making the four payments, it said LISCR appears to have stopped the practice.

Yoram Cohen, chief executive of the registry, acknowledged it "was requested and required by the government" to make the payments to nongovernment accounts, saying that by mid-August LISCR had become "uncomfortable" with the practice. He said LISCR "never knowingly made a payment to an arms dealer," but added: "It's not our job to conduct any due diligence as to whom we pay money -- it's the government's money."

Lami Kawah, Liberia's ambassador to the U.N., said he "wasn't aware that Liberia had made payments to purchase arms."

After LISCR rebuffed the requests by the Bureau of Maritime Affairs last year, the agency used some of its share of the maritime revenue to pay San Air, the report said. The U.N. report recommends the Security Council set up an escrow account for revenue generated by LISCR, to be audited by Liberia's government and the International Monetary Fund.

Some members of the panel say privately that the success of the U.N.-imposed diamond embargo in Liberia has cut diamond smuggling so much that Liberia is turning to its timber and maritime enterprises to fund regional conflicts. Last year, LISCR generated revenue of almost $44 million, providing the government with roughly $18 million.