By Agathe Duparc, Montse Ferrer & Antoine Harari
In Libya, a country that has been torn apart and bled dry since the fall of Gaddafi, international criminal networks with connections to Europe and Switzerland make big profits through fuel smuggling.
Public Eye and TRIAL International uncovered business transactions in 2014 and 2015 between the Swiss trader Kolmar Group AG and a smuggling network whose main players are now facing trial in Sicily. This is the story of a long-running investigation in Switzerland, Malta and Sicily.
PART THREE
KOLMAR: A FLAGSHIP FROM ZUG IN MARC RICH’S EMPIRE
To date, Kolmar Group AG has attracted very little attention. The private company was set up in Zug in 1997 under the name Kolmar Petrochemicals AG and was initially active in the petrochemicals trade.
According to its incorporation documents, one of its founders is the renown Marc Rich – Marc Rich & Co Holding GmbH – founder of Glencore, which at the time was represented by Moshe Michael Glass.
Its two other shareholders are ChemCore SA, owned by Ruth Sandelowsky, a former Phibro employee (the company where Marc Rich started his career), and the Swiss fertilizer giant Ameropa, which is owned by Andreas Zivy.
Kolmar has since grown and been restructured. It entered the petroleum products trade in the early 2010s. Ruth Sandelowsky, currently CEO, and her partner, Rafael Aviner – domiciled in the United States – run the show, though the current shareholders are not publicly disclosed.
We do however know that the corporate lawyer Josef Bollag, Ukraine’s honorary consul in Zug, was on the company’s board until July 2019. Kolmar gained a foothold as one of the small flagships of the Canton of Zug.
This image is confirmed by visiting the canton’s business promotion website, which prominently features a nice quote from Ruth Sandelowsky, promoting the authorities of the Canton of Zug as ‘by far the most professional that I have experienced during my long career.’ She adds that Kolmar was ‘welcomed with open arms’.
The company is not quite on par with large traders like Glencore or Trafigura, but it is an important player in the biofuel market. It has 250 employees and, according to the most recent figures, in 2013 its annual turnover was nearly USD 8 billion.
A member of the Swiss Trading and Shipping Association (STSA), Kolmar is present in some 20 countries, including Singapore and the United States, where it opened a branch and purchased a bio-fuels plant in Connecticut in 2016.
Follow the ships
It’s not a very impressive place. A small motorboat drops us off at a slightly dilapidated quay where fishermen have thrown their rods into the water.
Tourists usually take a water taxi to admire the beautiful landscape and visit the port of the Grand Harbour, the natural harbour that borders the Xiberra peninsula, home to Malta’s capital of La Valetta.
We asked to veer off towards the port and industrial facilities – the area is full of cranes and rusty, old ships are docked. We want to locate the Ras Hanzir installation and above all understand where its contents come from.
We get there. Under the curious gaze of fishermen, we take several pictures of stilts that allow ships to dock and unload their shipments into the Ras Hanzir tanks, or to replenish their supplies. In English, this structure is called a ‘dolphin’.
From October 2012 to December 2015, Kolmar was the exclusive leaser. Having won several calls for bids, the Zug-based company rented Ras Hanzir’s eight fuel tanks. This fact was officially confirmed by Enemed Co Ltd, the Maltese state-run petroleum company that owns them.
From July to December 2015, Kolmar also occupied all five of the fuel tanks belonging to the Has Saptan underground storage facility, which is located by the airport. We obtained this information from a Maltese journalist who relied on Malta’s Freedom of Information Act (FOIA), the country’s transparency law.
Alongside activities seeming perfectly legal, we documented a strange pattern of tankers that left Libya near Zawiya, where the Ben Khalifa network operated, and offloaded 22 times at two dolphins where the Kolmar tanks were replenished.
FOLLOWING THE SHIPS’ TRACKS
During his speech in Geneva in October 2018, Chairman of the Tripoli NOC Mustafa Sanalla insisted that there are effective technical means to collect data on ships used by smugglers.
‘There is more information available from AIS systems, satellite imagery, automated ship registries and shipborne radars’, he suggested, encouraging the international community to make use of them.
We did just that, aggregating data provided by vessels’ Automatic Identification System (AIS). This system for the exchange of automated messages between ships by high-frequency radio makes it possible to discover the identity, status, position and course of ships.
It is considered a reliable tool and frequently used by law enforcement agencies in the United States and Europe to track smugglers. The American NGO C4ADS, which specialises in analysing complex data, helped us analyze the comings and goings of three tankers between Malta and Libya: the ships Amazigh F, Ruta and Selay, all chartered by Darren and Gordon Debono.
Their movements from the Libyan coast between June 2015 and June 2016 had already been pinpointed by the UN and analysed by the Guardia di Finanza investigators.
We were interested in an earlier period: from spring 2014 to December 2015 (the date when Kolmar apparently ceased its activities in Malta).
The result is shocking: from 27 May 2014 to 18 July 2015 we discovered that Ruta, Amazigh F and Selay offloaded marine gasoil 22 times at the dolphins of Ras Hanzir (19 times) and Has Saptan (3 times) at a time when Kolmar was leasing these storage units.
The Maltese state-owned Enemed confirmed that a total of 50,911 MT were offloaded on these occasions. In most cases, the tankers were returning from the Libyan coast where, interestingly enough, they had taken care to switch off their AIS system for several hours or even days, thereby enabling the smugglers to temporarily fall off the radar.
We checked this data against the bank transfers made by Kolmar to Oceano Blu Trading Ltd. The overlap between the dates is striking. From 15 June to 17 July 2015, the Amazigh F and the Selay moored at the Ras Hanzir and Has Saptan dolphins nine times. On nearly the same dates, i.e. from 18 June to 22 July 2015, the Zug-based company transferred over $11 million to Darren Debono’s company.
ARE THE PAPERS IN ORDER?
The product was partly sold on the local bunkering market, where Kolmar supplied barges that came to fill up their tanks, as we were able to reconstruct based on AIS data. The smuggled fuel was also sold in Europe.
As we learned, in order to import fuel from Libya, the Swiss trader provided the Maltese customs authorities with seemingly complete documentation. The documents provided included the certificates of origin by Tiuboda Oil Refining Company, the company belonging to Fahmi Ben Khalifa, who is identified by the UN panel as one of the most important smugglers in Zuwara.
The Dirty Oil investigators came across these same certificates of origin. They were able to determine that they were fraudulent and created using the scanner of a Maltese company, World Water Fisheries, which was run by Darren Debono. While Kolmar was active in Malta, the Maltese authorities accepted them without batting an eyelid.
‘Despite their illicit Libyan origin, the customs authorities and the Libyan-Maltese chamber of commerce gave the green light to the re-export of the gasoil, either because they were incompetent or because they were also involved in the fraud’, affirmed a connoisseur of these practices in Malta.
‘NATIONALISING’ GASOIL
The product was partly sold on the local bunkering market, where Kolmar supplied barges that came to fill up their tanks, as we were able to reconstruct based on AIS data. The smuggled fuel was also sold in Europe.
‘Our theory is that, like Maxcom Bunker SA [the Sicilian company charged by the Italian authorities as purchasing the smuggled Libyan gasoil], Kolmar was ‘nationalising’ the fuel in Malta in order to remove all traceability and resell it in Europe’ explained an Italian legal source.
‘When the fuel arrives to a European port, the importing company pays customs duties and other consumption taxes. It is then free to blend the fuel with European products and sell it in Europe as an EU product with a EUR1 certificate.
The Libyan origin is no longer discernable on paper’, he explains. To whom was Kolmar reselling this gasoil? Our investigation did not get us all the way up the chain. The Swiss company left the island in early 2016.
A few months later, Maltese customs finally decided to ban the import of Libyan gasoil into Malta, ‘forcing Darren Debono to transfer his business to Sicily, where he was eventually caught by the Italian authorities,’ according to one source.
Kolmar or the art of navigating troubled waters
At the time when the transfers were made by Kolmar to Oceano Trading Ltd, from June to July 2015, neither the UN experts nor the Italian investigators had Fahmi Ben Khalifa and his Maltese partners on their radars.
Could it be that the Zug-based company was unaware that it was doing business with a band of smugglers? Several facts lead us to believe it could not have been so – starting with the situation in Libya at the time.
By the summer of 2014, civil war had broken out between western and eastern Libya. For several months, oil infrastructure (terminals, pipelines and wells) had been regularly taken hostage by armed groups.
Crude oil production plummeted to 230,000 barrels per day. The country was forced to import more and more refined petroleum products and drastically reduce its exports, which could only be authorized by the Tripoli NOC.
The ten or so testimonies we gathered from within the oil trading sector confirm that trading with Libya was – and continues to be – an extremely high-risk activity.
As explained by one Geneva-based trader, ‘Since the fall of Gaddafi, purchasing Libyan fuel became a real headache. The risk is too high, and not just in terms of smuggling. If you send a tanker to Libya, you have no guarantee that it will be able to load its shipment on the set date due to the fighting.
Having a ship standing still is very expensive. That’s why the small and medium-sized enterprises cannot afford to work in Libya. Only the large trading houses can take on the risk’. He added that ‘the large traders bought the official quotas of petroleum products sold by the NOC; the rest came from smuggling’.
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Agathe Duparc is a journalist for Le Monde.
Montse Ferrer is a Senior Legal Advisor and Investigator of the International Investigation and Litigation (IIL) program of TRIAL International.
Antoine Harari – Swiss freelance investigative journalist based between Geneva and Palermo.
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PUBLIC EYE For around fifty years, the Swiss NGO Public Eye has offered a critical analysis of the impact that Switzerland, and its companies, has on poorer countries. Through research, advocacy and campaigning, Public Ey world. With a strong support of some 25,000 members, Public Eye focuses on global justice.
TRIAL INTERNATIONAL is a non-governmental organization fighting impunity for international crimes and supporting victims in their quest for justice. TRIAL International takes an innovative approach to the law, paving the way to justice for survivors of unspeakable sufferings. The organization provides legal assistance, litigates cases, develops local capacity and pushes the human rights agenda forward.
