Golden Visa for Sale! Now on special offer for the 1%

European passports and Schengen visas are the most desired traveling documents in the world. Not only do they grant the most traveling freedom, they give access to a safe and stable living environment, with free speech, in a market that can fulfill all your needs.

Many EU countries have taken advantage of this by offering entry in exchange for investment. This kind of activity is commonly referred to as a Golden Visa Program. For the subject countries, they are indeed golden, because they have the potential to bring in billions of capital into the country. Latvia, for example, used the program to stabilize its economy after the financial crisis.

According Transparency International, such programs have been in existence since the 1980s, and currently at least 12 EU Member States are offering them. Usually the reward is a residence permit, however Cyprus and Malta offer a fast track to citizenship should the customer invest enough money, and Portugal offers the citizenship option after a six year waiting period.

While the controls in most European countries should prevent individuals who are sanctioned by the EU from obtaining citizenship, many individuals took advantage of Golden Visa programs prior to implementation of the current international sanctions. It is a complicated matter for a nation to try to implement sanctions on its own citizens and capital that is invested within the country.

Most of these programs are legitimate, but the way they are set up invites abuse. Real estate is one of the easiest ways to launder dirty money, and these programs are taken advantage of all over the place.  

Some of the Golden Visa and Golden Passport programs are complex and might involve long red tapes and waiting periods. Of course, sometimes a suitable facilitation payment can fix that…

Latvia Golden Visa Program

The Latvian Golden Visa Scheme was heavily criticized. From 2010 to 2014, Latvia offered it at a discount price of EUR 71,150 if invested in countryside real-estate. The price for living in Riga was doubled to a value of EUR 142,300. As you can see, this could very easily be taken advantage of by someone looking to spend dirty money.

The number of people who took up this offer increased substantially  in 2014, the same year that Russia annexed Crimea. Almost 90% of the visa applicants came from Russia and countries that were formerly in the Soviet Union.  Thus, a program that had originally been intended for economic development and brought wealth to Latvia in the previous years had become embroiled in political significance.GV-by-Year

Picture 1: Latvian Golden Visas per year (Source)

The negative effects of the program eventually convinced the Latvian Administration to dismantle the discount in 2014. The greatest risk of these visa programs was spying, according to the deputy head of the Latvian Security Police in a 2017 parliamentary committee hearing. Then, of course, there was the risk to the economy, since many applicants were unable to prove the legality of their money. Although the program has since been dismantled, the effects of it and risks introduced by it will be felt for years to come.

Hungarian Golden Visa Program

Another interesting notorious golden visa program was the one in Hungary.

The Hungarian Golden Visa program was slightly different than in Latvia. Instead of it being based on investment in real estate, applicants had to buy a state bond from one of eight companies that had solitary rights to sell them on the behalf of the government. These bonds, which totaled up to EUR 300 000, were not inexpensive.

The results of this program were remarkable. The eight companies were able to earn about USD 600 million – and that’s a conservative estimate – over the course of the years that this program was running from 2013 to 2017. (OCCRP May 16, 2018)

The program ended in 2017 after criticism concerning the integrity of the eight bondseller companies. They were pretty mysterious – most were registered in offshore tax havens and it wasn’t completely clear who exactly profited from the sales.  

An investigation conducted by g7.hu and Transparency International Hungary uncovered the way these companies worked. Basically, companies would be assigned to territories around the world and allowed monopolies to sell the bonds under the program. But the way these companies were assigned required inside knowledge and connections – it wasn’t like it was a public tender. They had to have known about it separately since it was never advertised. Per the law, all the applicants were meant to be listed on the Hungarian Economic Committee’s agenda, but this was not always the case.

Although the Golden Visa program in Hungary has since been shut down, there are some rumors that a new ‘golden’ immigration program may be coming. Direkt36 reported that this new program was advertised by a Hong Kong based company on the Chinese platform WeChat. This new program now more closely resembles Latvia’s program, where applicants are required to invest a value of EUR 78 000 into Hungarian real estate.

Case Study: Who buys the visas? 

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Picture 2: Screenshot of Mr. Bogolyubov from The Times

Mr. Gennadiy Bogolyubov, the Cypriot, the Israeli, the Brit, the Ukrainian

Main Source: EveningStandard 11 Sep 2018

Mr. Gennadiy Bogolyubov is a popular face in the oligarch edition of the Bold and the Beautiful. He and his business partner, Mr. Igor Kolomoisky, are some of the best customers for UK lawyers – the costs alone for the litigation with their rival Mr. Viktor Pinchuk was estimated to be over GBP 50 million. The allegations and adverse reputation of the duo include alleged murders, violent takeovers and other accusations of mafia-style activities.

The two partners were very successful in post-Soviet era privatizations. Allegedly, the hasty privatization of a national bank in Ukraine to PrivatBank enabled the duo and their associates to empty out the bank’s capitalization with a decade long fraudulent loan scam.

To protect taxpayers’ interest and due to demands from Ukraine government’s external financiers (i.e. USA) PrivatBank was re-nationalized in 2016. “When Ukraine’s finance minister went to oversee the nationalization of the country’s biggest bank in December 2016, he took with him a team of bankers—and a security detail of special-forces operatives” (Wsj.com April 6, 2018).

Amongst Mr. Bogolyubov’s hobbies are philanthropy, which he practices through Bogolyubov Foundation.

Golden Visa United Kingdom Tier 1 Investor Visa (2009)

Cyprus Golden Citizenship (2016)

Nationalities Ukraine, Cyprus, Israel, United Kingdom
Current Residence Switzerland
Net Worth Unknown, was Ukraine’s #3 richest in 2010 (Kievpost)
Frozen Assets At least USD 2.6 Billion, shared with Mr. Igor Kolomoisky
Costs to Ukrainian Taxpayers USD 6 Billion to recapitalize Privatbank
Close Business Partner Mr. Igor Kolomoisky, who, according to a quote from the British Court, has taken over companies “at gunpoint” in Ukraine. Mr. Kolomoisky is a former governor and listed as an inactive PEP (Politically Exposed Person) per Dow Jones
Other Associates Mr. Alexander Zhukov, father of Roman Abramovich’s girlfriend
Powerful Enemies Mr. Viktor Pinchuk
London Real Estate GBP 62.5 Million home

GBP 20 Million house

Eaton Place Mansion

GBP 173 Million office block

Table 1. Mr. Gennadiy Bogolyubov’s Connections

This article was co-written by Oskar Savolainen and Kristina Weber of Centry Ltd. For more content like this, be sure to subscribe to Centry Blog for articles related to the security and risk industries.

What to Pack in a Grab-Bag

One of the ways that you can prepare yourself for an emergency is to stock a grab-bag. That is, a bag containing a handful of supplies that could make all the difference in recovering after an emergency, whether it’s a natural disaster or hostile threat.  The idea is that you need only to take this single bag with you as you respond to a crisis, ensuring that you have what you need for immediate survival following the contingency.

The exact necessities that you pack will be impacted by your geographical location and the regional-specific risks therein, but here are a few ideas to get you started:

Information & Documentation

This should include your passport and/or visa, and any other important documents related to your identity. This is especially important if you are travelling abroad, particularly if the contingency requires you to leave the country. Even if it is for a home-emergency, being able to have at least a couple identifying documents will assist you in the recovery of other important documents after the fact.

Food & Water

A stock of high energy, non-perishable food items and as much water as you can feasibly carry.

Communications

A spare mobile phone with a charger.

Health & Safety

Basic first aid kit and any essential medications that you may require day-to-day.

Other

Some other items to include in your grab bag are money, a change of clothing, candles, matches, a flashlight/torch, and spare batteries.

Keep in mind that the general advised contents of this grab bag address the needs of the average individual whether they are at home or traveling. Family and/or group kits will vary, especially if there are pets involved. 

If you have any questions or would like expanded detail of this, please don’t hesitate to contact us at info@centry.global! Remember to subscribe for weekly updates on Centry Blog, and follow us on Twitter @CentryLTD for more content like this.

A Quick Look: South China Sea Disputes

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The South China Sea is a critically important trade route of the world, with an estimated $5-trillion worth of goods passing through yearly, which amounts to about 30% of global maritime trade. In addition to that, there are vast oil and natural gas reserves under the sea, and it is the site of lucrative fishing grounds, providing the main source of animal protein for the densely populated southeast Asia.

For all of its resources and strategic value, the South China Sea is highly contentious. Several sovereign states all have varying claims over different sectors of the waterway and the islands therein, whereas non-claimant states advocate for the South China Sea to remain international waters.

These maritime and territorial disputes are complex and sprawling in their nature. To better grasp the greater picture of the situation, we’ve broken it down into a few sections.

The Claimants

The prime areas of contention in the South China Sea include the Spratly Islands, Paracel Islands, and various boundaries in the Gulf of Tonkin. Each claimant nation wants something specific, and they all have their individual justifications for what they want. The main players in the territorial disputes have been China, Taiwan, Vietnam, The Philippines, Indonesia, Malaysia, and Brunei.

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Image 1. South China Sea Claims

China depicts its claims to the South China Sea using the map of the nine-dash line, a vague demarcation line that was inspired by a December 1947 then-Republic of China (1912-1949) map with eleven segments. After the Communist Party of China formed the PRC, the claim was amended to the “nine-dash line” that we know today. The U-shape of it can be observed in Image 1 above.

Taiwan (ROC) also uses the 1947 map it as a basis for their own claim to the contested waters, because it was published before the PRC was established. Taiping Island, also known as Itu Aba Island, is the largest isle of the Spratly group and it remains steadfastly in Taiwan’s control. As one of the world’s biggest seafood exporters, Taiwan’s interests in the region are connected to fishing and oil.

Vietnam’s claim over the Paracel and Spratly islands was first established in a White Paper issued by the Ministry of Foreign Affairs in 1974, with historical evidence as a basis for the claims. It has been a vocal opponent of China’s historical claim over the South China Sea, asserting that China had never claimed sovereignty over the islands before the 1940s, whereas Vietnam had actively ruled over both the Paracel and the Spratly Islands since the 17th Century.

However, tensions between China and Vietnam have been de-escalating ahead of agreements to resolve their disputes. In April 2018, Chinese Foreign Minister Wang Yi gave an announcement that China and Vietnam are moving toward a settlement agreement on the status of their claims in the South China Sea.

The Philippines has historically cited its geographical proximity to the Spratly Islands as the main basis of its claim to the Scarborough Shoal, however its President Rodrigo Duterte has avoided aggressive rhetoric on the issue, saying that he “will not impose anything on China.”

This came after the July 2016 international arbitration that ruled China could not legally claim most of the South China Sea – including a rebuke of the nation’s manmade islands. Although China is a signatory to the UN Convention on the Law of the Sea, it refused to accept the court’s authority on this case.

Malaysia has claimed seven islands in the Spratly group, of which two are also claimed by Vietnam and one by the Philippines. Thus, it has occupied the remaining four and constructed mini-naval stations to reinforce its claim.

Brunei by contrast is sometimes referred to as a “silent claimant” of the South China Sea, however it first asserted rights shortly after gaining independence from Britain in 1984. Its principal interests revolve around the development of offshore oil and natural gas fields – both within its EEZ and outside of its territorial waters. Its claim is on Louisa Reef, which is on its continental shelf, however the Louisa Reef is also part of the Spratly islands, a feature claimed by both China and Vietnam.

Recently, Indonesia ramped up the territorial disputes by renaming the northernmost waters of its exclusive economic zone in the South China Sea to the North Natuna Sea, despite China’s claims to the area.  Ian Storey, a senior fellow at the Institute of Southeast Asian Studies in Singapore, suggested that the renaming of the waterway helped to make it “sound more Indonesian.” It has increasingly conducted aggressive posturing in the area, including a military buildup on nearby Natuna Islands and deployment of naval warships.

For decades, Indonesia’s official policy has maintained that it is not party to any territorial disputes with China on the South China Sea, yet in 2016, the two countries had three maritime skirmishes, including warning shots and a situation where Indonesian warships seized a Chinese fishing boat and its crew.

China’s Manmade Islands

In recent years, China has been building various ports, runways, and radar facilities on manmade islands throughout the South China Sea. CSIS Satellite images from 2016 depict large anti-aircraft guns and weapons systems as well.

These man-made islands have been constructed by dredging sand on to reefs in an effort to boost China’s claim to the Spratly Islands in the South China Sea. China had previously committed to not militarizing the islands, however the CSIS imagery suggests otherwise. Nonetheless, the PRC government maintains that the islands are for maritime safety and civilian purposes.

The Situation at Present

On April 11th, 2018, the Chinese navy began a 3-day drill near its main submarine base in what analysts described as a message to other nations in the area that it was capable of defending its territorial and maritime interests. This display came right as an American strike group, led by the aircraft carrier USS Theodore Roosevelt, conducted its own exercises in the South China Sea. The United States maintains that the South China Sea is international water, and therefore the United Nations Convention on Laws of the Sea should determine sovereignty in the area.

These exercises additionally overlapped with a week-long series of live-fire drills involving the aircraft carrier Liaoning, near the venue for the BOAO Forum for Asia. On the sidelines of the forum, senior fellow Oh Ei Sun said that all the surrounding countries were concerned by the military exercises in the region. This area is significant because it has several underwater channels and straits that could allow China’s submarine fleet to break through the United States’ first and second island chain blockades. Although the location for these specific demonstrations was in a less sensitive area than the South China Sea, it nonetheless served as a means for China to illustrate its military might to the other claimants involved in the disputes.

PRC President Xi Jinping presided over the Chinese navy’s largest military display on April 12th, 2018. The state broadcaster, China Central Television, showed footage of Xi boarding the destroyer Changsha before sailing to an unspecified location in the South China Sea to watch the procession. China’s armed forces are in the middle of a modernization program, and the subsequent military buildup has seemingly unnerved its neighbors, particularly due to the increasing assertiveness on the territorial disputes of the South China Sea.

China intended on holding live-fire military drills in the Taiwan Straits on April 18th, however, it was reported that the drill scaled down in an effort to reduce tensions. The Taiwanese military similarly cancelled a scheduled cannon drill.

The probability of South China Sea disputes leading to an outbreak of hostilities is unlikely, however since China has continued to pursue its territorial and maritime claims, the potential for escalating small-scale skirmishes cannot be ruled out. Furthermore, any escalations in the trade corridor may have an impact on the global economy, particularly if sanctions become involved.

This article was written by Kristina Weber of Centry Ltd. For more content like this, follow @CentryLTD on Twitter!

Human Trafficking in the European Union

The European Union regards human trafficking as one of the most heinous violations against human rights. Efforts to address this complex issue have been a primary focus for EU strategies on national and international levels.

Among other findings in a country-by-country statistical analysis on human trafficking in the period of 2010-2012, Eurostat reported in 2015 that 80% of the registered victims were female, more than 1,000 children were trafficked, and over 70% of traffickers were male. It should be noted that not all 28 EU Member States were able to provide data, and the statistics are based on the small amount of information available from registered sources. As a result, there is certainly more that goes on undocumented.

However, one particular finding noted that among non-EU states, Nigeria was over-represented

in both the statistics of both victims and traffickers. In the 3-year course of the study, it was found that of the registered victims with non-EU citizenships, there were 1,322 registered victims from Nigeria, as compared to the next highest non-EU state, Brazil, with 537 registered victims. The most frequently reported non-EU citizenship of suspected traffickers over the course of the reference period was also Nigeria, with 299 individuals.

The International Response

The U.S. Department of State has classified Nigeria’s human trafficking narrative as Tier 2: Watchlist on a scale of 1-3 in their 2017 human trafficking report. This means that the government of Nigeria does not fully meet the minimum standards for elimination of trafficking. There are challenges present where some elements of Nigerian Security Forces (NSF) were found to have used children as young as 12 in support roles, and the Nigerian military conducted on-the-ground coordination with the CJTF, which includes non-governmental militias that recruit and use children in support roles, and possibly unwillingly. Furthermore, government officials were found to be involved in sexual exploitation of Borno State women and girls that were displaced by Boko Haram.

That said, Nigeria is making a significant effort to improve. Efforts to investigate, prosecute, and convict traffickers in Nigeria are remarkable, as well as conducting anti-trafficking training for law enforcement officials, however the growth is slow-going, with limited increases in efforts compared to the previous reporting period.

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Picture 1. NAPTIP & Finland sign MoU to collaborate in curbing trafficking in 2017 (Accessed March 2018)

One such anti-trafficking organization in Nigeria is the National Agency for the Prohibition of Trafficking in Persons (NAPTIP), which recently made headlines when Europol put out a statement detailing how Spanish police forces in cooperation with NAPTIP and UK’s National Crime Agency (NCA) dismantled a Nigerian organized crime ring that had trafficked victims to Europe through Libya and Italy. Among their efforts was a block on bank accounts that laundered more than 300k euros for the crime ring, leading to 89 arrests and the liberation of 39 victims.

The crime network was found to be connected to the Eiye Confraternity (Air Lords), one the most influential campus cult originated gangs in Nigeria. It operates in clandestine groups worldwide, funding the confraternity in Nigeria through both legal and illegal activities.

Campus Cults in Nigeria

Campus cults represent a widespread gang and organized crime problem in Nigeria, as many post-secondary institutions have confraternities. The majority of these cult groups are involved in organized crime.  Recruitment is sometimes involuntary, and the initiation rites involve assault to varying degrees. Some of the cults operate their business with a secret membership model and some of them dominate streets openly. At peak, tens of murders have been connected monthly to confraternity related violence. The Nigerian democracy is relative new, and amongst the former and current cult members are local politicians and other influential members of society. According to some sources, politicians have been known to have used the gangs as their private armies, and the cults have had active roles in the nation’s internal conflicts.

The Eiye Confraternity is very active in social media, utilizing it to give voice to their opinions and in fact openly using platforms such as Facebook and WhatsApp for coordination purposes.

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Picture 2. Screenshot of a FB page voicing support for EIYE confraternity (Accessed Mar 2018)

Global Business Response

To address the crime of human trafficking, companies have been complementing their due diligence processes with human rights impact assessments and taking relevant related risks in consideration for their existing assessments and processes. This is typically done in compliance with international guidelines such as the United Nations’ Guiding Principles for Business and Human Rights via implementing the “Protect, Respect, and Remedy” Framework. However, new national-level legislations, such as the French Corporate Duty of Vigilance Law, are starting to make human rights duty of care a mandatory compliance for global supply chains. With regard to the issue at hand, global enterprises will be duty-bound to do whatever is in their power to ensure their supply chain isn’t exploited for human trafficking purposes.

This article was written by Investigator Oskar Savolainen and Content Supervisor Kristina Weber of Centry Global. For any questions or comments on the above material, please feel free to contact us @CentryLTD on Twitter or on any of our other social media platforms!

 

A Closer Look: Revived Corruption Charges Against Zuma

In a televised address, Mr. Shaun Abrahams, the national director of public prosecutions at the National Prosecuting Authority (NPA) in South Africa, announced that he would be reviving 16 charges against the former South African President, Mr. Jacob Zuma. These include 12 charges of fraud, one of racketeering, two of corruption, and one for money laundering.

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The charges are related to an incident in the late 1990s, when Mr. Zuma allegedly accepted bribes during a $2.5 billion arms deal between the government and a French weapons supplier. He was indicted at the end of 2007 on a range of charges associated with the deal, but the NPA dropped them in 2009, thus clearing Mr. Zuma’s path to the presidency. Then, in Autumn 2017, while Mr. Zuma was still in office, South Africa’s Supreme Court of Appeal upheld a ruling to reinstate the charges, and condemned the 2009 decision to drop them.

In 2014, Mr. Zuma was accused of using tax payer money to pay for upgrades to his rural residence, including a swimming pool, amphitheatre, and cattle pen.

Mr. Zuma resigned from his post in February under considerable pressure from the ruling African National Congress (ANC) party. The ANC has since affirmed its confidence in the country’s criminal justice system, and cautioned that Mr. Zuma has the right to be presumed innocent until and if proven guilty.

Mr. Abrahams said that there are “reasonable prospects of successful prosecution of Mr. Zuma on the charges listed in the indictment.”

This is but the latest in a series of reckonings against corruption in South Africa. Other avenues have included an impending judicial commission of inquiry into state capture. Implications in a 2016 watchdog report alleged that the Gupta family, billionaire friends of Mr. Zuma, used connections to him to win state contracts and influence cabinet appointments. State capture refers to a type of systemic political corruption, in which private interests significantly influence a state’s decision-making processes.

Additionally, there are at least three separate parliamentary inquiries into corruption at state-owned enterprises ongoing in Parliament. A spokesperson for the NPA said there are hundreds of files related to state capture across state-owned enterprises and provincial governments– asset forfeiture will be primarily used as the first step toward addressing corruption across the public sector.

Further reading on red flags associated with state-owned enterprises may be found here on Centry Blog.  

For more content like this, follow @CentryLTD on Twitter! If you have any questions or comments, feel free to reach us on any of our social media platforms.

Hidden Sanctions Risk: North Korean ties to Africa

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Dozens of sculptures, monuments, and buildings in countries such as Senegal, Namibia, Democratic Republic of Congo, Zimbabwe, Mozambique, and Botswana were built by Mansudae Overseas Projects, which is a construction company based out of Pyongyang in North Korea. 

Most of these projects are war memorials or other dedications to the respective nations’ struggles for independence. To give perspective, the following is just a few examples of some of the monuments that were built by Mansudae.

  • Senegal: African Renaissance Monument
    • The African Renaissance Monument is a nearly 50-meter tall bronze statue overlooking the Atlantic. It was dedicated on April 4th, 2010, which is Senegal’s “National Day” to commemorate the 50th anniversary of the country’s independence from France.
  • Namibia: Heroes’ Acre
    • The Heroes’ Acre was opened on August 26th, 2002 in the hills south of Windhoek as a token of honor to those who “…made great and meaningful contributions to the liberation of the Land of the Brave…” (Source)
  • Democratic Republic of Congo: Laurent Kabila
    • This statue commemorating Laurent Kabila was reportedly built by Mansudae. Kabila was a Marxist revolutionary who served as the third President of the Democratic Republic of Congo, when he overthrew Mobutu Sese Seko.
  • Zimbabwe: Joshua Nkomo statue
  • Zimbabwe: National Heroes Acre
    • The Heroes’ Acre in Zimbabwe commemorates the fallen veterans of Zimbabwe’s war for independence. Its design closely mirrors that of the Revolutionary Martyrs’ Cemetery just outside Pyongyang, North Korea.
  • Mozambique: Samora Moises Machel
    • A statue of Mozambique’s first president was constructed in 2011 in Maputo, Mozambique. Samora Machel is remembered as a military commander, politician, and revolutionary in the tradition of Marxism-Leninism.
  • Botswana: Three Dikgosi Monument
    • AKA The Three Chiefs, this bronze-cast monument was built in 2005 and features the three leaders (Khama III, Sebele I, & Bathoen I) who traveled to Great Britain in 1895 to ask Joseph Chamberlain and Queen Victoria to separate the Bechuanaland Protectorate from Cecile Rhodes’ British South Africa Company and Southern Rhodesia.

Specifically, the city of Windhoek in Namibia has been referred to as an ‘unlikely testament’ to North Korean industry. Many architectural staples of the city, such as the presidential palace, the national history museum, and the defense headquarters, were built by North Korea, for profit.

Two years ago, the United Nations stated that Namibia had violated U.N. sanctions through its commerial relationship to North Korea. The Treasury Department had sanctioned Mansudae Overseas Projects, as well as the Korea Mining Development Trading Corporation (KOMID), which has come to be known as North Korea’s primary arms dealer. Namibia has since pledged to cut commercial ties to the DPRK, although they did state that they would retain warm diplomatic relations with the regime.

U.N. officials have conducted an investigation into at least seven African countries for sanctions violations concerning North Korea. These countries were also supposed to end their economic and military relationships with North Korea following the sanctions, however the U.N. panel of experts noted that what reporting had occurred was largely poor in quality or otherwise unclear, with a high number of States not reporting altogether.

The connection between Namibia and North Korea stands as but one example among many similar stories. It began in the 1960s, when several African countries started the struggle for independence from colonialism. During this vulnerable time period, North Korea invested time and money in these revolutions, where the political ties eventually grew into commercial relationships.

Now, this has become particularly important as sanctions have mounted against the regime. North Korea has been able to use their commercial ties to African nations like Namibia as financial lifelines– evidence by building infrastructure, and selling weapons and other equipment.

With these concerns in mind, it should be noted that it is important for businesses conducting operations in Africa to ensure that potential commercial partners will not put them at risk for violating sanctions. This risk may be mitigated through due diligence and watch-list screening.

If you or your organization have any questions or thoughts on this, please feel free to reach out to us at Centry. We can help!

The Next Gold Rush: Renewable Energy

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The Renewable Energy industry just might be the next gold rush for businesses and investors alike. This time, we aren’t hiking into the Klondike for gold; individuals and organizations alike are turning their eyes toward the broader world, looking out for opportunities to make good on this booming initiative.

With all of its natural resources and varying biomes, Africa is a premium location for infrastructure development and investment into renewable energy. With sustainable energy investment set to grow to $57-billion by 2020, it’s clear the gold rush has already begun.

The massive desert that stretches across North Africa to the Arabian Peninsula and the Persian Gulf beyond has incredible potential for solar power. While this might seem like an obvious choice for solar technology, it has not been until recently that factors such as social pressures, oil prices, and technological readiness have combined to create tangible opportunity.

For a long time, one of the major hindrances to solar power was the expense of implementing it, but in recent years we have seen a drastically lowered manufacturing and installation cost– now, unsubsidized solar is as cheap as coal, natural gas, and wind projects.

Just last week, the Government of Canada and IFC, a member of the World Bank Group, formed an initiative to spur renewable energy growth in Sub-Saharan Africa. This program will have the Canadian government contribute $122 million USD, which the ICF will use to kindle private sector investment into renewables, aiming to improve access to affordable and sustainable energy services.

Algeria also has ambitious plans for solar energy, with a proposal for the installations of 13 gigawatts of capacity toward solar power (out of 22 total for renewable energy) by 2030. To put those numbers in conceptual terms, it’s enough power to meet a quarter of domestic energy needs whilst still reserving a significant portion for exports.

Energy exports will face a market barrier as electric storage technology strives to catch up, but in the United States, the Federal Energy Regulatory Commission (FERC) approved a new rule on Thursday that may begin to clear the way. This order’s objective is to enhance competition and promote efficiency in the electric wholesale markets, with the overall effect of greater reliability and cheaper costs. With lowering costs comes the potential for greater investment yet.

Even the oil giant Saudi Arabia has started on the renewables train, with a recent movement to diversify its economy into the sustainable energy industry. By the end of the year, the country aims to invest $7bn into the development of new solar plants and a large wind farm.

However, with big money comes big risk, and the renewables industry certainly is not immune to it. Companies that may be tempted to dip their toes into the booming sector should keep the following things in mind.

Namely, there are reputational and legal risks if an organization’s actions do not line up with their environmental claims. This may incur adverse media content, which could impact the organization’s reputation toward its employees, partners, clients, consumers, and the general public.

Furthermore, companies could be subject to litigations if they violate regional environment regulations. Beyond that, there are the ever-present natural environment risks, which encompasses things like sandstorms blocking out solar farms, as well as regional risks that may include things such as terrorism or other crimes.  

Some of these threats can be mitigated with proper treatment and due diligence. For those, Centry can help! 

For any questions or comments, please feel free to contact us on any of our social media platforms!