11.10 U.S. Action Pivotal
After determining that our evidence met the threshold for action, U.S. law enforcement launched another investigation in early 2016. The move proved timely. After meeting with CZ sales representatives at the January 2016 SHOT Show, ExploAfrica sent CZUB a new purchase order on February 12, 2016.292 In the purchase order, ExploAfrica asked CZUB for more than 110 firearms. ExploAfrica and CZUB continued to transact the deal until U.S. law enforcement intervened in March 2016, warning CZ-USA of negative consequences if sales to the Mozambican gunrunning network continued.
Those consequences included the possibility that CZ-USA and CZUB would lose lucrative federal government contracts.293 The companies could have also run afoul of the Department of Treasury for violating sanctions against a major drug kingpin in Mozambique, a concern we pointed out to CZ-USA in our email correspondence with the company in January 2016.294
Penalties for violations of the Kingpin Act range from civil fines up to $1.075 million per violation to more severe criminal sanctions. Criminal penalties for corporate officers may include up to 30 years in prison and fines up to $5 million. If convicted of criminal charges under the Kingpin act, corporate officers can face as much as 30 years in prison and fines of up to $5 million. Criminal fines for corporations may reach $10 million.295
If CZ-USA and/or CZUB did not undertake sufficient due diligence—operating as they did in both the high-risk country of Mozambique and high-risk industry of armaments—they could also be at a heightened risk of having facilitated sanctionable conduct on the part of their downstream clients in Mozambique, especially in regard to violations of UN sanctions on North Korea.296
There is also the strong possibility that CZ-USA could face administrative sanctions, financial penalties, or criminal charges for its participation in a transnational criminal conspiracy to supply guns to the rhino TCO.
U.S. law enforcement warnings may have been effective. On March 8, 2016, we received an email from Mr. Spencer in response to our ongoing inquiries:
received your 3/2 email. CZ-USA has received similar questions in a U.S. government investigation. CZ-USA intends to fully cooperate with and assist that investigation. CZ-USA is not able to respond to the inquiries of other entities while that investigation is ongoing.297
This email was the last time CZ-USA responded to our inquiries.
Even though the American subsidiary was under U.S. investigation, the race to stop future CZ rifle shipments to Mozambique wasn’t over. One day after Mr. Spencer’s email, CZUB informed ExploAfrica that the licenses were being prepared to fulfill ExploAfrica’s most recent order.298 By mid-March, ExploAfrica had obtained an export permit from the Mozambican Ministry of Interior to advance the deal. We obtained correspondence between CZUB and ExploAfrica showing that the arms deal was close to being finalized.299
But then, on March 23, 2016, the deal began to collapse, with CZUB informing ExploAfrica that “our production postponed the plan for producing CZ 550 MAGNUM LUX 458 WM.”300 Those .458-caliber hunting rifles were among the most concerning weapons for U.S. law enforcement. The email signaled the end was in sight for CZUB’s and CZ-USA’s participation in the illicit gun supply chain. The arms companies’ moment of accountability had finally come, and our follow-the-gun methodology received its most momentous payoff yet.
The precise date that CZUB and CZ-USA halted rifle deliveries to the criminal enterprise is unclear. CZUB and the Czech Embassy in South Africa told us separately that CZUB had halted Mozambique deliveries in September 2015.301 But that date is clearly incorrect, as we had accompanied a CZ shipment aboard a plane traveling from Portugal to Mozambique one month later, in October 2015.
U.S. law enforcement officials say they were told the CZ firearms shipments to Mozambique stopped in June 2016. That month, however, ExploAfrica placed a new order for a handful of CZ hunting rifles with a Portuguese arms shop, Espingardaria Altamira in Lisbon.302 Although we did not further investigate this order, we believe it suggests ExploAfrica relied on the practice of “smurfing” via European retail shops—another possible conduit for the shipment of CZ-USA rifles to Mozambique. Contradicting what CZ-USA told U.S. law enforcement, CZUB told Mozambique authorities that the company committed to a six-month voluntary ban on firearms sales to Mozambique in December 2016.
Regardless of the actual moratorium date, CZUB’s freeze on rifle deliveries to Mozambique demonstrates how the likelihood of facing legal jeopardy, prosecution, and/or other penalties are among the strongest deterrents to criminal activity. Not until CZ-USA and CZUB felt direct pressure from U.S. law enforcement were they willing to modify their illicit behavior. If Kruger or South African officials had similarly intervened with the company in 2014, when proof emerged linking CZ rifles to the rhino syndicate’s gunrunning network, thousands of rhinos might have been saved.
Certain Mozambican officials also tried to stem the influx of CZ rifles by presenting charges against the organized crime syndicate to the Attorney General’s office in October 2015, but that effort was nixed, possibly due to high-level corruption.303 The net result was that CZUB and CZ-USA continued engaging with a criminal enterprise conspiring to outfit the rhino TCO with CZ weapons even after we put them on notice for being complicit in massive wildlife crime.
A little over a year after receiving warnings from U.S. law enforcement, CZUB responded to ExploAfrica’s request for an update on its pending 2016 order. In an email dated April 3, 2017, CZUB stated that it could not send arms to Mozambique because of outstanding issues with CZ rifles in Kruger Park.304 But the email also referred to those rifles as having been “stolen.” The stolen rifles cover story was another patent falsehood, but certain Rhino Rifle Syndicate members nevertheless saw it as a potential life raft should they find themselves in legal jeopardy. ExploAfrica replied via email the same day: “Thanks for the information I hope to resolve soon so we can buy again.”305
Even though U.S. law enforcement intervened with CZ-USA and CZUB in 2016, not one member of the gunrunning enterprise has been arrested. This impunity has encouraged the rhino TCO to search out new sources of firearms and firearm distribution methods. ExploAfrica began acquiring other foreign arms to fill the vacuum left by the exodus of CZUB and CZ-USA in 2016.306