Congos pricey passport scheme

sends millions of dollars offshore

SMILE FOR THE CAMERA: President Joseph Kabila of the Democratic Republic
of Congo at the launch of the country's new biometric passport in Kinshasa in
November 2015. Kabila remains in office despite protests that new
presidential elections are overdue. RTNC/Handout via Reuters TV---
EXPENSIVE: An immigration official displays a Democratic Republic of Congo
biometric passport. They cost about a third of the average citizens annual
per capita income. REUTERS/Stringer

TRAVELLER: The passport photograph of Makie Makolo Wangoi, reported to

be a relative of President Joseph Kabila of the Democratic Republic of Congo.
The impoverished Democratic Republic of Congo has introduced
biometric passports costing $185 apiece. But most of that money
does not go to the state. Instead millions of dollars go to a private
company in the Gulf - and sources say it is owned by a relative of
President Joseph Kabila.
(En franais)

By David Lewis-Filed April 13, 2017

KINSHASA - One day in November 2015, President Joseph Kabila

visited his foreign ministry and smiled broadly as a computer took
his photograph and fingerprints. He was there to mark the launch
of the Democratic Republic of Congos new biometric passport,
fitted with a chip to store details of his identity.

Kabila and his aides have extolled the benefits of the passports,
saying they will allow freer movement across an increasingly
security-conscious world. In private, the organisers of the deal
have another reason to celebrate: It presents an opportunity to
make hundreds of millions of dollars off some of the poorest
people on the planet.

The passport is among the most expensive in the world, costing

each Congolese applicant $185. A UK passport costs half as
much, and a U.S. passport $110.
Yet according to documents reviewed by Reuters, the Congolese
government will receive just $65 from each passport. Instead,
most of the money will go to Semlex, a firm based in Belgium that
is producing the travel documents, and to a small company in the
Gulf.

That Gulf company, called LRPS, receives $60 for every passport
issued, according to documents relating to the deal between the
Congo government and Semlex. LRPS is registered in Ras Al
Khaimah in the United Arab Emirates (UAE), a jurisdiction where
details of ownership are often kept secret.

According a person with direct knowledge of the passport deal,

LRPS is owned by Makie Makolo Wangoi, who is believed to be a
close relative of Kabila. This source said that Wangoi travelled to
the UAE in June 2015 to complete the transfer of LRPS shares
into her name. Documents referring to travel arrangements and
the share transfer indicate that Wangoi owns LRPS, though the
evidence is not conclusive.

Reuters sent questions about LRPS to Wangois email address but

received no reply. The Congolese presidency did not respond to
Reuters inquiries about the passport scheme and the ownership of
LRPS. Nor did Semlex respond to requests for comment.
After these various inquiries were sent, a senior Congolese
security official contacted Reuters and said he would provide
responses on behalf of Kabila, Wangoi, and others. He later said
all questions should be referred to the CEO of Semlex, Albert
Karaziwan, and supplied no further comment.
Karaziwan did not reply to emails or text messages sent to
him. Lawyers for him declined to comment, citing possible legal
action over a person involved in the passport deal for allegedly
disseminating misleading information. Reuters gave Kabila and
others multiple opportunities to say whether any of the
information about the passport deal in this article was misleading.
They did not respond.

The surprising cost of Congos passports is highlighted by a

rival proposal from a separate Belgian company called Zetes. In
that document, reviewed by Reuters, Zetes outlined plans in 2014
to supply biometric passports to Congo for $28.50 each. Zetes
confirmed making such an offer.
Over time, Congos $185 biometric passports could generate
hundreds of millions of dollars for LRPS and Semlex while
diverting potential revenue away from an unstable and
impoverished state. According to the United Nations, the average
per capita income in Congo is just $680 a year.
The Congolese state needs all the funds it can get and has
previously missed out on revenues from big corporations: A 2013
report by the Africa Progress Panel said Congo appeared to have
lost out on $1.3 billion in revenues from five mining deals since
2010 because state companies had systematically undervalued
assets when selling concessions to investors. Those deals
involved complex transactions between big enterprises; in the
passport scheme, the state is losing out on revenue that comes
directly from ordinary citizens.
Kabila was due to step down in December but elections have
been postponed, leaving him in charge as domestic opponents
assert his authority has run out. Dozens of people have been
killed in violent clashes between protesters and police.
During Kabilas rule, some of his close associates have acquired
considerable wealth through interests in numerous businesses in
the country, according to the corruption watchdog Global Witness.
In December, the news agency Bloomberg detailed a network of
about 70 companies not including LRPS - that it said were linked
to members of Kabilas family, including Wangoi.
Kabila did not respond to requests for comment on that story
either, but officials close to Kabila have denied Congo is losing out
in deals that favour officials or businessmen close to the
president. They have also defended his familys involvement in
business, saying they are private citizens who have a right to
engage in commercial activities.
IDENTITY EXPERT
Over the past 20 years, Semlex has become a leader in providing
identity and travel documents for African nations. From its
headquarters in an imposing building on Avenue Brugmann in
Brussels, it has supplied clients stretching from Guinea-Bissau in
Africas west to Kenya in the east and Madagascar in the Indian
Ocean.
Landing a contract in Congo one of the continents most
populous nations, with some 70 million people had the potential
to be highly rewarding for the firm. Documents seen by Reuters,
including correspondence between Semlex and the government
and agreements between individuals and firms involved in the
deal, paint a picture of how the contract was pulled together.
DEALMAKER: Semlex CEO Albert Karaziwan, right, talking to DR
Congos President Joseph Kabila during the launch of the countrys
biometric passports in Kinshasa in November 2015.
RTNC/Handout via Reuters TV
A key figure was Semlex CEO Karaziwan, who founded the
company in 1992 and whose family owns all but a small
percentage of the business. Karaziwan is a Belgian of Armenian
origin, born in the Syrian city of Aleppo. He owns a turreted castle
in Belgium and has business interests from real estate to
restaurants. His main focus is technology and security for
governments, particularly in Africa.

Between October 2014 and June 2015, Karaziwan engaged in a

series of communications with Congolese authorities, including
several letters addressed directly to Kabila, according to
documents reviewed by Reuters. On Oct. 16, 2014, Karaziwan
sent Kabila an outline of his companys expertise, saying Semlex
was able to offer biometric passports at a cost of 20 to 40 euros
each ($21.50 to $43), thanks to having its own printer in
Lithuania.

Five days later, Karaziwan sent another letter to Kabila. This time
he invited two senior officials from Kabilas inner circle, Moise
Ekanga Lushyma and Emmanuel Adrupiako, to Dubai for meetings
to discuss a possible contract.

Ekanga has headed the Congolese government office overseeing

billions of dollars of cooperation between Congo and China.
Adrupiako is an influential financial adviser who has worked with
Kabila since 2001. One official with detailed knowledge of the
workings of Kabilas presidency described Adrupiako as the
informal treasurer in his office.

In early November 2014, Semlex said it could produce passports

at $50 apiece, according to the documents seen by Reuters. In a
letter sent to Kabila on Nov. 13, the price had risen to $120.

In March 2015, Karaziwan was invited to Kinshasa, DR Congos

capital, by the foreign minister to finalise a deal. By the end of
May, a proposal for Semlex to provide passports for five years was
cleared by the budget ministry.

On June 11, 2015, Karaziwan and Congos Foreign Minister

Raymond Tshibanda and Finance Minister Henry Yav Mulang
signed the final contract. Semlex agreed to invest $222 million in
the project. The Congolese government would charge citizens
$185 per passport, a steep rise from the $100 cost of the
countrys previous passports.
On the day the passport was launched, Karaziwan, Tshibanda and
a group of Semlex workers posed for a photograph, seen by
Reuters: In the middle was Kabila, grinning broadly.

Weeks later, the prime minister of Congo at the time, Mapon

Matata Ponyo, wrote to Foreign Minister Tshibanda complaining
that he had only heard about the passport deal in the press. In
the letter, reviewed by Reuters, Matata Ponyo asked for more
details on the contract to see whether it met requirements for
transparency. He never received a reply, a spokesman for Matata
Ponyo said.

A senior official at the body that regulates government contracts

in Congo, the Autorit de Regulation des Marchs Publics, said the
passport deal should have gone through a public tender. This did
not happen, said the official. It was handled directly by the
Ministry of Foreign Affairs. The contract should have been
published.

THE SPLIT

The June 11 contract provides that $65 from each passport be

earmarked for the Congolese state. The remaining $120 was
allotted to a consortium that includes Semlex Europe, based in
Brussels; Semlex World, based in the United Arab Emirates;
Semlexs Lithuanian printer; and the UAE entity called LRPS.

CONSORTIUM DEAL: The first page of one of the contracts setting

out arrangements for Congos biometric passports. Click here for
full document: PDF
GULF COMPANY: The incorporation certificate for LRPS, based in
Ras al Khaimah. Click here for PDF

That $120 was further divided up by two other agreements, also

dated June 11. According to one contract, a Kinshasa-based firm
called Mantenga Contacto Trading Limited was allotted $12 from
each passport in return for handling much of the projects human
resources issues, including supplying staff. Mantenga
acknowledged Reuters inquiries but supplied no comment.

The three Semlex firms involved in the deal were allotted $48 per
passport.

That left $60 out of the $120 allotted to the consortium. According
to documents seen by Reuters, that $60 from each passport
issued was allocated to LRPS. In return, LRPS would help with
administration, logistics and the relationship with the
government.

LRPS was represented in the talks with the government by

Karaziwan, the boss of Semlex, according to the contract between
Semlex and the Congolese government.

Reuters was unable to verify the current status of LRPS. But its
certificate of incorporation with authorities in Ras al Khaimah
shows it was set up on Jan. 14, 2015, as Semlex was negotiating
the passport deal with Kabilas representatives. The document
does not say who owned the company when it was created. But a
second document an agreement to transfer shares indicates
that later in 2015, LRPS was owned by Cedric Fevre, a Frenchman
based in Dubai who is a business associate of Karaziwan.

Though this computer-created document is unsigned, metadata

embedded in it shows that it was created in the UAE in 2015 and
printed on June 25 that year. That was the day that Fevre
transferred all 10,000 shares in LRPS to Wangoi, according to the
source with direct knowledge of the passport deal.

A second source, who was aware of the deal without having direct
knowledge, also said Wangoi became the owner of LRPS.

The person with direct knowledge of the passport deal said that
the only signed copies of the LRPS share-transfer agreement are
held by Fevre and Wangoi. Reuters has not seen a signed copy,
and Fevre and Wangoi did not respond to questions for this article.
Wangoi is little known outside the Kabila family. Corporate records
confirm she is a shareholder in several companies with other
Kabila family members. In two of these firms, Congo-based Shaba
Impex Sprl and Shaboil Sprl, Wangoi uses the name Makolo wa
Ngoy Kabila in the registration. Two people familiar with the
presidents circle said Wangoi is one of Kabilas many sisters. She
was identified as a Kabila sister in the Bloomberg investigation
into the business interests of the presidents family. Another
source, who has studied Congo and Kabila for many years, said
she could be a niece.

The passport contract runs for five years. It doesnt stipulate how
many passports will be made, but in recent years Congo has
issued around 2.5 million of its old passports annually. A person
with direct knowledge of the Semlex operation said the Belgian
company had produced 145,000 of the new biometric passports
by the end of January 2017, which would earn LRPS nearly $9
million.

In another document reviewed by Reuters, Semlex said that it

would be able to supply Congo with 2 million passports a year,
once the operation was fully up and running. That suggests the
Belgian company could receive nearly $100 million a year from
the deal, while LRPS could receive $120 million a year.
Posted by Thavam