A Libyan engineer purported to have used HSBC’s Swiss services was implicated in arms trafficking that involved a Maltese offshore company.
The revelation is found in the Swiss Leaks list of HSBC clients shielded from tax authorities and uncovered by an international group of investigative journalists.
The unnamed engineer is briefly mentioned in one of the stories published on the website of the International Consortium of Investigative Journalists.
“HSBC also provided financial services to a Libyan engineer with ties to former dictator Colonel Muammar Gaddafi and who allegedly worked with members of the Italian mafia from 2006 to attempt to import 500,000 Chinese Kalashnikov rifles to Libya,” the article said.
The engineer was linked to an arms trafficking probe by Italian judicial authorities in 2006 that uncovered a massive shipment of assault rifles and millions of ammunition rounds.
Nicknamed Operation Parabellum by the judicial authorities, the investigation led to the arrest of several Italian intermediaries – Ermete Moretti, Gianluca Squarzolo, Massimo Bettinotti, Serafino Rossi and Vittorio Dordi – who turned in State evidence as part of a negotiated sentence.
According to a briefing note by GRIP, a Brussels-based disarmament research group, the arms transaction was valued initially at $40 million – $64 million after accounting for commissions and bribes paid along the way.
Some of the money was transacted through Middle East Engineering Ltd, a Malta-based company, owned by Moretti and Bettinotti.
Some of the money was moved through Middle East Engineering, based in Malta
With a registered office in Pietà, the company never deposited any accounts or financial statements with the Malta Financial Services Authority apart from the articles of association when it was created in 2003.
Although the transactions involved companies in Malta and Cyprus, the judicial authorities established that most of the activity was executed on Italian territory.
According to GRIP, the identity of the Libyan officials, described as top officials close to Gaddafi or relatives, indicated this was not a simple transaction to get arms into Libya. Judicial authorities suspected the ultimate beneficiaries would have been fighters in conflict zones such as Iraq and Congo.
Swiss Leaks has uncovered the secretive practices adopted by HSBC’s Swiss arm before 2008 to attract clients and help them avoid scrutiny and taxes in their home countries.
However, the leaked list includes arms traffickers, blood diamond dealers and dubious characters from dictatorial regimes.
ICIJ said while some of HSBC’s accounts associated with alleged arms dealers were eventually blocked, others remained active. It is not clear whether the account of the Libyan engineer was blocked.
kurt.sansone@timesofmalta.com