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US Treasury launches new sanctions; mining/oil mogul Dan Gertler designated

New York (Platts)--21 Dec 2017 721 pm EST/021 GMT


The Trump administration launched Thursday new sanctions targeting those it described in a statement as "human rights abusers and corrupt actors around the world."

Included on the list is Israeli billionaire Dan Gertler, recently a senior adviser to the Fleurette Group, which sold its 31% stake in the Democratic Republic of the Congo's Mutanda copper mine to Glencore in mid-February.

The president imposed sanctions on 13 individuals and the Treasury Department's Office of Foreign Assets Control imposed sanctions on an additional 39 individuals and entities. The sanctions mean that all assets within US jurisdiction of the individuals and entities included, or designated by OFAC, are blocked and US persons are generally prohibited from engaging in transactions with them.

"Today, the United States is taking a strong stand against human rights abuse and corruption globally by shutting these bad actors out of the US financial system," Secretary of the Treasury Steve Mnuchin said in a statement. "Treasury is freezing their assets and publicly denouncing the egregious acts they've committed, sending a message that there is a steep price to pay for their misdeeds."

Treasury's statement described Gertler as "an international businessman and billionaire who has amassed his fortune through hundreds of millions of dollars' worth of opaque and corrupt mining and oil deals in the Democratic Republic of the Congo."

Treasury alleges that Gertler "used his close friendship with DRC President Joseph Kabila to act as a middleman for mining asset sales in the DRC, requiring some multinational companies to go through Gertler to do business with the Congolese state." As a result, between 2010 and 2012, the DRC reportedly lost more than $1.36 billion in revenue from the underpricing of mining assets that were sold to offshore companies linked to Gertler, according to Treasury.

Until its exit earlier this year, Gertler's Fleurette Group had partnered with Glencore on Mutanda and Kansuki, two adjacent copper and cobalt projects in DRC's Katanga province. Mutanda and Kansuki merged in July 2013 to create Mutanda Mining, a major asset along the African Copperbelt in the DRC.

Glencore paid $960 million in February to buy the mines, of which Gertler received an estimated $534 million, thereby allowing Glencore to disassociate from him. Gertler has steadfastly denied any wrongdoing.

At the time of the sale, Gertler said in a statement: "We are extremely proud of what we have achieved at Mutanda. Together with Glencore, Fleurette has enabled the mine to deliver on its full potential and it has become one of the largest taxpayers in the DRC. We have shown we can make massive investment decisions in challenging, complex operating environments, and expand great assets which in turn provide huge benefits to the people of the DRC."

According to Forbes magazine executive profiles, Gertler soon plans to drill for oil in the DRC's Lake Albert, where tests have shown as many as 3 billion barrels. Treasury said that Gertler in 2013 sold to the DRC government for $150 million the rights to an oil block that Gertler purchased from the government for just $500,000, "a loss of $149.5 million in potential revenue."

In the related action, OFAC designated Pieter Albert Deboutte, Fleurette Properties Ltd., Fleurette Holdings Netherlands B.V., Gertler Family Foundation, Oil of DR Congo SPRL, Jarvis Congo SARL, International Diamond Industries, D.G.D. Investments Ltd., D.G.I. Israel Ltd., Proglan Capital Ltd., Emaxon Finance International Inc., Africa Horizons Investment Ltd., Caprikat Ltd., Foxwhelp Ltd., Caprikat and Foxwhelp SARL, Lora Enterprises Ltd., Zuppa Holdings Limited, Orama Properties Ltd., DGI Mining Ltd. and Rozaro Development Ltd.

--Joe Innace, joseph.innace@spglobal.com

--Edited by Jason Lindquist, jason.lindquist@spglobal.com




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