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9. Financing international crimes

Providing financial resources to those who commit international crimes may result in liability, if those resources substantially contribute to those crimes being committed. The risk of liability increases if the company persists in doing business with the violators, particularly once the violations are common knowledge.

Liability for financing the commission of atrocities is often bundled together with other forms of aiding and abetting. At times it forms an important part of the risk of liability in doing business with particular parties known to be egregious human rights abusers. In particular, certain domestic statutes may prohibit making payments to particular listed terrorist or armed groups. Deeper involvement, such as providing loans or direct financial support to such groups with knowledge of their activities may result in more serious allegations, including criminal charges for being an accessory to serious international crimes such as genocide, crimes against humanity or war crimes.

Due Diligence for Financing International Crimes

Case 9.1 Chiquita in Colombia

In March 2007, Chiquita Brands International Inc. pleaded guilty in a U.S. District Court to one count of engaging in transactions with a terrorist organization.

The plea agreement arose from payments that Chiquita allegedly made over a period of several years to the violent, paramilitary organization United Self-Defense Forces of Colombia (AUC). In April 2003, Chiquita made a voluntary self-disclosure to the U.S. government of its payments to the AUC, giving rise to the investigation.

For over six years – from sometime in 1997 and into early 2004 – Chiquita was alleged to have paid money to the AUC in two regions of Colombia where Chiquita had banana-producing operations: Urabá and Santa Marta. Chiquita allegedly made these payments, often every month, through its Colombian subsidiary Banadex. In total, Chiquita was alleged to have made over 100 payments to the AUC amounting to over $1.7 million.

Chiquita was charged under the US Immigration and Nationality Act, since the AUC had been designated by the U.S. government as a terrorist organization in 2001. This designation made it a federal crime for Chiquita, as a U.S. corporation, to provide money to the AUC. It was charged that by September 2000, Chiquita's senior executives knew that the corporation was paying the AUC and that the AUC was a violent, paramilitary organization.

The court heard allegations that Chiquita's payments to the AUC were reviewed and approved by senior executives of the corporation, including high-ranking officers, directors and employees. Chiquita allegedly paid the AUC by check through various intermediaries and recorded these payments in its corporate books and records as "security payments" or payments for "security" or "security services." It was alleged that the payments resulted from threats implied to Banadex staff by the AUC and that Chiquita did not receive actual security services in exchange for the payments


Under the terms of the plea agreement, Chiquita's sentence included a $25 million criminal fine, the requirement to implement and maintain an effective compliance and ethics program, and five years' probation. The agreement was accepted by a federal judge in September 2007. In accepting the fines, the prosecution agreed not to name or prosecute the executives involved in ordering the payments, a deal the Colombian government has criticized, saying they will seek to extradite Chiquita executives if they find Colombian laws have been violated. At the same time, lawsuits have been filed against Chiquita in the U.S. by victims of the AUC.

Sources for this summary

U.S. Department of Justice Press Release, March 19, 2007

Other Relevant Cases

Prosecutor v. Félicien Kabuga

A Rwandan businessman was indicted by the United Nations International Criminal Tribunal for Rwanda (ICTR) for four counts of genocide and one count of crimes against humanity for his alleged role in financing the political and militia groups that committed the genocide in Rwanda in 1994. Félicien Kabuga was a wealthy and influential Rwandan businessman, accused of funding and providing logistical support to the Interahamwe militia and of financing the RTLM radio station which broadcast messages inciting the genocide. He was indicted for Conspiracy to commit Genocide; Complicity in genocide; Direct and public incitement to commit Genocide; and Extermination, a Crime Against Humanity.

According to the charges, from 1992, Kabuga – through his company ETS - is accused of having purchased large stocks of machetes, hoes and other farm tools and with having supplied weapons and uniforms, and transport in his company-owned vehicles, to the Interahamwe in the belief that this material assistance would be used during the massacres. In addition, it is alleged that Kabuga and others created the National Defence Fund in order to buy weapons, vehicles and uniforms for the Interahamwe and the army and that Kabuga was appointed as President of the National Defence Fund’s Acting Committee. It is alleged that he had signatory power over the fund’s bank accounts and that he informed the Interim Government about the existence of this fund and counseled the government on how to manage and to use it. Kabuga is still wanted by authorities.

Prosecutor v. Félicien Kabuga, ICTR-98-44B-I, Amended indictment, 01 October 2004.

Trial Watch Félicien Kabuga

U.S. v. Friedrich Flick

In the aftermath of World War II, a leading German industrialist, Friedrich Flick, was convicted of aiding and abetting the crimes of the SS through financial means.

Flick and five officials of his companies were indicted on charges of slave labor, plunder and spoliation, seizure of Jewish mining and industrial properties, and being accessories to actions of the German SS. Three of the accused were convicted on different counts including counts of slave labor, plunder and spoliation, and being accessories to the SS, the crimes of which included murder, brutalities, cruelties, tortures, atrocities, and other inhuman acts. One of Flick’s associates was convicted of membership in the SS.

Flick and another co defendant were convicted as accessories to a criminal organization, the SS, because of their financial contributions to the SS. Flick made such contributions as a member of the Friends of Himmler, a circle of businessmen who provided financial contributions to the SS. The Tribunal ruled that: “One who knowingly by his influence and money contributes to the support thereof must, under settled legal principals, be deemed to be, if not a principal, certainly and accessory to such crimes.”

(VI Trials of War Criminals Before the Nuremberg Military Tribunals Under Control Council Law No. 10 (1950); Records of the United States Nuernberg War Crimes Trials,United States of Amercia v.Friedrich Flick et al. (Case V) March 3, 1947-December 22, 1947; see also Business and International Crimes
Victor Bout Extradited to U.S.
Victor Bout has been extradited to the U.S. to face charges of allegedly selling weapons to an organization on a U.S. anti-terrorism list. Bout spent two years in a maximum security prison while Russia and the U.S. fought a legal and diplomatic the tug of war in a Thai courtroom. For background see this report the BBC's "From Our Own Correspondent". For more detailed background info see this collection of documents from The Hague Justice Portal. See also this report from August 2010 by Al Jazeera English .
Corruption Case Against African Leaders Moves Ahead in France
France's Supreme Court (Cour de Cassation) has ruled that an investigation into corruption by three African leaders can proceed. The case involves the alleged acquisition of properties, cars, and bank accounts by three foreign heads of state. "The inquiry should also shed light on the role played by various intermediaries...including banking institutions".
Conflict Minerals Law Passed in U.S.
A new U.S. law requires publicly traded companies to disclose to the SEC whether their products contain gold, tin, tungsten or tantalum from Congo or adjacent countries. If so, they have to describe what measures they are taking to trace the minerals' origin. The State and Treasury departments are examining the possibility of future sanctions against U.S. companies that use "conflict minerals."
US Military Paying Protection Money in Afghanistan
Private companies sub-contracted to the Pentagon are allegedly "paying millions of dollars in protection money to Afghan warlords, and potentially to the Taliban, to secure convoys carrying supplies to U.S. troops in Afghanistan", congressional investigators said in a report.
Governments Must Remove Barriers to Corporate Accountability says new report
A report out this week from Fafo, Amnesty International, and the Norwegian Peacebuilding Centre identifies obstacles to judicial remedies for business involvement in human rights abuses and sets out a series of reforms. The report argues governments need to take urgent action.
Wood Products Multinational in Court over allegations of Funding Liberia's War
Campaigning organizations have lodged a complaint in France against leading international timber company Dalhoff, Larsen and Horneman (DLH) alleging that "during the civil war in Liberia from 2000-2003, DLH brought timber from Liberian companies that provided support to Charles Taylor's brutal regime."
Kabuga's assets frozen
A Kenyan judge has upheld an appeal against Kenya's decision to freez the assets of a Rwandan businessman wanted by the ICTR on charges of having helped to finance the Rwandan genocide. Felicien Kabuga was indicted by the tribunal but is still at large.
French Court to Investigate Assets of African Presidents
A French court has decided to open a judicial investigation into assets held in France by three African presidents. The NGOs who launched the case under anti-corruption laws in France say an investigation will have to determine how the assets were acquired and where the funds came from: "The investigation will also throw light on the various intermediaries involved in the transactions under scrutiny, namely the banks identified by the police investigation whose compliance with anti- money laundering regulations is in question."
Victor Bout in Extradition Battle
Arms and transport broker Victor Bout is at the centre of a Russia-U.S. tug of war, with U.S. lawmakers demanding his extradition and Russia protesting strongly.
EU adds Companies to Zimbabwe Sanctions List
"More than 60 individuals and firms with links to Mr Mugabe have been added to a list of those banned from travelling to the EU or doing business there. Those on the sanctions list are suspected of having links to human rights abuses in Zimbabwe." The BBC reports

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