Viktor Bout is extradited to the United States aboard a Drug Enforcement Administration plane on Nov. 16, 2010. Credit: DEA

By George Gao
UNITED NATIONS, Mar 28 2013 (IPS)

Viktor Bout earned a few monikers in his heyday: “Merchant of Death”, “Sanctions Buster” and “Lord of War”. He’s the poster boy for illicit arms brokers – a guild of shadowy intermediaries who link arms suppliers to their end users.

While Bout sits in a jail in the southern U.S. state of Illinois, U.N. member states are concluding an Arms Trade Treaty (ATT) – an international agreement that hopes to control a trillion-dollar industry and curtail the use of arms for human rights violations. They justify in the most compelling ways that what they do is actually good for the world, using phrases like ‘in defence of humanity’ and ‘arming people to keep the peace’.

But “arms brokering” in general was hardly brought up during ATT negotiations at U.N. headquarters, from Mar. 18-28, even though Bout’s like-minded successors and contemporaries – many of who fuel the abuse of arms – remain at large.

“There’s something sinister here,” said Kathi Lynn Austin, executive director of the Conflict Awareness Project, referring to the relationships between governments and arms brokers.

“Governments around the world depend on brokers to carry out their national security operations,” she told IPS, pointing out that brokers are the main facilitators of any arms trade.

“If you talk about including these actors (in the ATT), and if you talk about bringing stronger control, then you open a can of worms and put a lot of governments on the spot,” said Austin, who’s own efforts led to Bout’s capture.

The reason brokering was not discussed, suspected Austin, was that governments made up their minds about brokering before ATT negotiations even began.

“Had there more time for (member states) to better understand the role of brokers and transporters, than you might have seen a stronger lobby for brokering,” she said.

“I just think we ran out of time (to convince them),” she added.

Brian Wood, head of arms control at Amnesty International, told IPS that there is an absence of national and international regulations surrounding brokering. Over two-thirds of U.N. member states lack national laws regulating the activity.

The final ATT itself contains only one small paragraph on brokering, which starts, “Each State Party shall take measures, pursuant to its national laws, to regulate brokering under its jurisdiction.”

Wood noted the significance of the phrase “pursuant to its national laws”. He said, “If two-thirds of countries don’t have (national) laws regulating brokering, then (by definition) the activity is not going to be illicit.”

Andrew Feinstein, author of “The Shadow World: Inside the Global Arms Trade”, told IPS that individual arms brokers are closely linked with defence contractors, governments and intelligence agencies.

Many governments and corporations are largely intertwined with arms brokers, using them as intermediaries to pay bribes and conduct other shadowy activities, he explained.

“Virtually every individual broker who is engaged in massive illegal arms trading activity are at one time or another being accessed by one or more intelligence agencies in the world,” he said.

Feinstein noted that such collusions might have played out during ATT negotiations.

“Defence companies, defence contractors and the defence sector are enormously powerful,” he said. “The ways their voices are heard are through the power they wield over governments.”

“These industries have incredibly close relationships with governments… They have an access to government which is quite unique,” said Feinstein, who served as a member of parliament for the African National Congress (ANC) in South Africa.

He also noted the U.K.’s position in the ATT talks. “The U.K. has been positive about some of the (strong ATT) measures imposed, but the way in which the U.K. engages in the trade is that they use a huge number of intermediaries from the world for the illicit trade,” he said.

“I think the U.K. is supporting transparency measures with the knowledge that the really big players (U.S., Russia and China) are going to put it back, and I don’t think they’re actually going to be that disappointed with it,” he added.

Feinstein warned that if the final ATT is too watered down, it might be worse than not having a treaty at all.

“It (would) effectively provide a stamp of approval for the status quo as it currently functions, a status quo that only intensifies conflict… and most ironically make the world a more dangerous place,” he said.

Who are the arms brokers?

Wood of Amnesty International told IPS, “The top arms brokers are what I call professors of the arms trade.

“They work systematically. They have a breadth of technical and legal knowledge. They have commercial acumen. They know the right people, and they’ll offer a ‘one-stop-shop’ type of service,” he said.

However, few people have a clear view of the arms brokering network. “No one has a list of arms brokers, because the governments don’t control them… We (only) get a snapshot of what’s happening,” said Wood.

The most “nefarious” brokers are the ones who are corrupt and who work to circumvent U.N. arms embargos, he added.

Feinstein, who spoke with an arms dealer as recently as last week, told IPS, “They have certain common characteristics. The first that strikes me about all of them is that they’re all these absolutely charming, larger than life, charismatic characters.”

Another characteristic, said Feinstein, is that “to a sociopathic extent”, these brokers are unable to comprehend the effects of their actions.

“They justify in the most compelling ways that what they do is actually good for the world, using phrases like ‘in defence of humanity’ and ‘arming people to keep the peace’,” he said.

“They’re unable to see the other side of what they do, the real human consequences of the ways they make huge amounts of money,” he added.

Brokering in the future

“Arms brokering thrives on globalisation,” said Wood, co-author of “The Arms Fixers: Controlling the Brokers and Shipping Agents” with Johan Peleman.

“There’s loads of submarkets for different things, thousands of products… this is tens of thousands of items being traded every day,” said Wood.

“The arms market themselves have become more differentiated,” he explained. “A lot of the stuff that’s traded are parts or components, so they’re not the finished systems.

“You have a lot of people who specialise in particular kinds of equipment. It’s a niche market,” he added.

“If they are not regulated… people may wake up and realise that brokers have taken them for a ride,” he warned.

An investigation by the Conflict Awareness Project has exposed an active arms trading network of associates of former trafficker Viktor Bout that involves companies from the United States, South Africa and the United Kingdom, among other countries.

All are cross-linked in a complex system with its centre in the island of Mauritius.

The traffickers’ ultimate goal was to access countries such as Iran, Sudan, the Democratic Republic of Congo, Somalia and possibly Syria, researchers say.

Kathi Lynn Austin, executive director of the Conflict Awareness Project, led the investigation and just returned from South Africa, United Arab Emirates (UAE) and Mauritius. The former U.N. arms investigator was able to track down the illicit activities of this network led by two main actors who once were Bout’s top lieutenants: Sergey Denisenko and Andrei Kosolapov.

“Many actors involved in this network had a connection to Viktor Bout and are back in the game of shipping arms to war zones,” Austin said.

Bout, also known as the “merchant of death,” is a former Soviet Air Force officer who in April was sentenced to 25 years in prison for trying to sell weapons and aircraft missiles to what he thought were members of the Revolutionary Armed Forces of Colombia (FARC) but were in fact part of a sting operation set up by the U.S. Drug Enforcement Administration.

This time around, the illicit activities took place in Mauritius, an island situated on Africa’s southeast coast. It is a strategic spot due to its location as a gateway between Africa, Asia and the Middle East and thanks to tax incentives, drop-box addresses and offshore banking.

The Denisenko-Kosolapov network tried to obtain an Air Operation Certificate from the Mauritius government, which is required for planes to take off. For that purpose they sought a partnership with a local aviation company with a pre-existing certificate so they could quickly start working.

“What they were doing was very similar to patterns I have seen before,” Austin said during the press briefing. “They wanted a flag of convenience, they wanted something called an air operation certificate.”

With multiple relationships, proxies and agreements, the two arms brokers built a complex network that involved companies such as Avialinx TRD (United Arab Emirates), Gibson & Hills Investment LTD (Mauritius), Superfly Aviation (Mauritius) and Island Air Systems LTD (Mauritius.)

“They actually operated with multiple layers, shell companies and holding companies with offshore bank accounts in order to facilitate their network,” Austin explained.

After different negotiations and change of tactics, and following a meeting between representatives from the Conflict Awareness Project and the Department of Civil Aviation and the Foreign Ministry of Mauritius, earlier this month the Mauritian authorities denied the application of the company Island Air System for the air operation certificate.

“We’ve stopped a trafficking operation from taking root in Mauritius,” said Austin. “But multiple governments still need to take direct action to shut down this global network for good.”

Although Denisenko and Kosolapov are barred from entering the U.S., they tried to evade U.S. sanctions and regulations by acquiring U.S. pilots, pilot training, aircraft and aviation services.

Since Denisenko is currently listed in the Specially Designated Nationals (SDN), any U.S. person or entity is banned from doing business with him or his companies.

“He actually acquired a lease agreement through a Finnish company called Alandia Air and leased a plane out of the U.S. from Bangor, Main, from a company called C&L Aerospace,” she said.

It was the U.S. division of the C&L Aerospace company that got caught up in the illicit activities of Denisenko and Kosolapov.

In the report, the company expressed their concern with the Denisenko connections: “We did not even think to check the possibility that they were performing illegal activities.”

The executive director of the Conflict Awareness Project told IPS that she met with the U.S. embassy in Mauritius and gave them information from the investigation, but she did not have an opportunity to follow up with the U.S. government.

“We’ve demonstrated an illegal activity occurring in the U.S. so then it becomes a matter for investigation and judiciary,” she explained.

The full report will be published on Wednesday under the title: “Viktor Bout’s Gunrunning Successors: Catch Me if You Can.”

This investigation’s finding were presented at the United Nations as some 190 governments are in the midst of negotiations for a global Arms Trade Treaty. It reveals the importance of a strong and effective treaty to control the flow and supply of weapons, ammunition and armaments.

When the main issue of controversy seems to be the inclusion of small arms and ammunition, Conflict Awareness Project’s report evidences the need to agree on a robust definition of cover brokers.

It recommends that any definition should include “the entire cast of intermediaries facilitating an arms trade transaction, such as dealers, transporters, financial entities, insurance agents and holding company managers.”

“You can have solid laws, good track records, and well-meaning intentions,” said Austin, “but without a uniform international standard, arms traffickers can still take advantage of the best-governed nations of the world.”