Michael Marchant | Khuraisha Patel
19 April 2018
Global corporations which propped up the apartheid regime and profited in return have not been held to account. This remains a central challenge in terms of the unfinished business of South Africa’s transition to democracy. Starting on 24 April, as South Africa prepares to commemorate 24 years of democratic rule, Open Secrets and the Centre for Applied Legal Studies (CALS) will be submitting a complaint to authorities in two countries regarding the role of European banks in aiding and abetting the apartheid regime. This is one step of many in demanding accountability from those corporate profiteers who benefited from injustice in South Africa. By Khuraisha Patel and Michael Marchant.
Who are the banks and what did they do?
Apartheid was a militarised state at war with South Africans and its neighbours. Many international banks were in the war by funding the regime and its military through credit. Yet it was a Belgian bank, Kredietbank (KBC), and its subsidiary, Kredietbank Luxembourg (KBL), that were at the centre of an apartheid money laundering machine that kept the war machine running. The state needed to purchase weapons but faced compulsory United Nations arms embargoes at the time – and it thus needed a secret way to send money to international weapons suppliers without the transactions being traceable.
To meet this need, KBL and KBC helped state-owned arms company Armscor establish a global money laundering network of secret bank accounts and shell companies in order to bust the arms embargo – we call it the “arms money machine”. In return, the banks reaped massive financial benefit. They are financial behemoths today, with KBC recording a market capitalisation of $25-billion (over R300-billion) in 2018.
Based on the evidence we gathered in researching the book Apartheid Guns & Money: A Tale of Profit it is clear that this machinery included over 800 secret bank accounts and over 100 front companies registered in Panama and Liberia, most of which were set up or held by the banks in question. The numbered accounts and front companies made it difficult to track the apartheid state as the real arms purchaser.