The Democratic Republic of the Congo is owed an estimated $3.7 billion (£2.2 billion) in unpaid customs duties and fines by companies operating in its copper-rich Katanga province between 2008 and 2013, according to an unpublished report commissioned by the public prosecutor’s office.
The report, dated November 2013, is part of an ongoing government investigation into suspected malpractice by customs agents and companies in the vast southeastern province. It accuses companies there of under-declaring the value of imports and exports, and sometimes avoiding tax altogether, often with the collusion of customs officials.
Some firms named in the report questioned the accuracy of its findings, while the head of the customs agency in Katanga said proper consultations had not been held with the companies, and suggested the report’s findings were exaggerated.
The public prosecutor, Flory Kabange Numbi, who declined to comment on the report, said in a letter to local rights groups that it was too early to draw conclusions about the outcome of the wider investigation.
DRC’s mining production has been limited by energy and infrastructure problems. The government is under pressure to maximize revenue from the sector to help the 65-million strong population out of poverty.
Two government ministers said the broader investigation must be completed, adding that any cash owed by firms must be paid to the government.
The report, compiled during a 10-day mission to Katanga led by Congolese attorney general Simon Nyandu Shabandu, examined 25 cases of alleged customs infractions. It found that 11 companies were liable for $741 million in unpaid taxes and fines, including Mutanda Mining, a copper miner 69 percent-owned by Glencore Xstrata plc.
Penalties were agreed by all parties after talks between the firms and the customs agency, the report said, although it noted that the mission did not visit Mutanda Mining, pending instructions from authorities.
Glencore strongly denied any wrongdoing and said the report was inaccurate. It had not agreed to any penalties, it added. “Contrary to what is stated in the draft document, no contact was made by the ‘mission’ with Mutanda mining. Mutanda has no outstanding taxes or fines,” a Glencore spokesman said.
The report said a further 252 alleged cases remain outstanding, worth an estimated $3 billion to the state in total.
Chemaf, a privately owned Congolese company among the 11 identified by the report as owing taxes, also denied the findings. “We are confirming that Chemaf does not owe $21.4m in unpaid taxes,” the Chemaf director, Sebastien Ansel, said.
Hyper Psaro, United Petroleum and United Oil and Soap, all of which belong to the private Congolese fuel, commodities and transportation conglomerate Hyper Psaro Group, and are named in the report as owing taxes, declined to comment.
Other companies identified as owing money – Comexas, Socimex, Sabot, Marine International, Frontier, Congo Loyal and Trade Service – either did not respond to requests for comment or could not immediately be traced.
International mining firms have invested billions in Katanga in recent years, eager to tap its vast copper and cobalt reserves. Mining made up 15.4 percent of DRC’s gross domestic product in 2012, according to the International Monetary Fund.
DRC produced 600,000 tons of copper in 2012, making it the world’s eighth-largest producer.
Shabandu’s team complained in the report that it was given only 10 days to carry out its work in Katanga, adding that firms did not cooperate fully with investigators. Chemaf was deemed among the most unco-operative.
“It is difficult for us to comment on specifics in the report when the report has not been shared with us,” Ansel said. “Chemaf does co-operate appropriately with the various Congolese agencies, and we are not aware of any instances where it has not been the case.”
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