The US Treasury Department announced that it had designated the brothers Ajay, Atul and Rajesh Gupta and their close business associate Salim Essa to be sanctioned under the Global Magnitsky Human Rights Accountability Act for corruption, including bribery and misappropriation of state assets.
The US move appeared to have been coordinated with the SA government as Minister of Justice Ronald Lamola issued a statement soon after, welcoming the action taken by the US “to ensure that the South African interests of justice unfold without any hindrance.”
The US said Treasury’s Office of Foreign AssetsControl (OFAC) was sanctioning them as “members of a significant corruption network in South Africa that leveraged overpayments on government contracts, bribery, and other corrupt acts to fund political contributions and influence government actions.”
Washington’s action means that all property and interests in property of the three Gupta brothers and Essa that are “owned, directly or indirectly, 50 percent or more by them, individually, or with other designated persons, that are in the United States or in the possession or control of U.S. persons, are blocked and must be reported to OFAC.”
The sanctions also prohibit U.S. persons from engaging in transactions with the four men, or entities owned or controlled by them.
These sanctions cast a broad net because of the extensive reach of the US financial system and usually have the effect of strongly discouraging business associates anywhere in the world from doing business with designated individuals just in case such transactions may have some US link, or are conducted in US dollars
“The Gupta family leveraged its political connections to engage in widespread corruption and bribery, capture government contracts, and misappropriate state assets. Treasury’s designation targets the Guptas’ pay-to-play political patronage, which was orchestrated at the expense of the South African people,” said Sigal Mandelker, Treasury Under Secretary for Terrorism and Financial Intelligence.
“The Guptas and Essa have used their influence with prominent politicians and parties to line their pockets with ill-gotten gains. We will continue to exclude from the U.S. financial system those who profit from corruption.”
Underscoring the importance which the US attaches to the sanctions, US Secretary of State Mike Pompeo also issued a statement, declaring that the US action, “demonstrates continued U.S. commitment to promoting transparency, accountability, and the rule of law globally.
“We commend the critical role played by South Africa’s civil society activists, whistleblowers, and investigative journalists to shine the spotlight on the Gupta network’s elicitation of criminal abuse of public office and other acts of corruption, which have deterred investment and impeded South Africa’s economic growth.
“The United States strongly supports ongoing efforts by the Government of South Africa, including its independent judiciary, judicial commissions of inquiry, and law enforcement agencies, to investigate and prosecute alleged instances of corruption. Successfully prosecuting and deterring corruption is essential to building a future of accountable government that fosters economic growth and opportunity for all of South Africa’s citizens.“
Lamola welcomed “the collaborative efforts by the USA government in the country’s fight against corruption.”
“The interest of justice must not be shackled by any boundary or border and justice must be seen to be done without fear or favour,” said Lamola.
SA officials rejected any suggestion that the US sanctions were a quid pro quo for Pretoria agreeing to extradite former Mozambican finance minister Manual Chang to the US rather than Mozambique.
Lamola’s predecessor Michael Masutha decided in April this year to extradite Chang to Mozambique. But in an unusual move, Lamola challenged this decision in the High Court, on the grounds that the Mozambique authorities had not properly disclosed when they applied for his extradition to face corruption charges in Mozambique, that he still enjoyed immunity from prosecution as a member of Parliament.
The US has also charged him for receiving massive bribes in a huge scandal involving the siphoning off of millions of dollars of international loans intended to finance shipping deals. DM