A senior U.S. official stated that Dan Gertler's royalties in the Democratic Republic of Congo should be directed to the country's government as a condition for any agreement that would alleviate sanctions on the billionaire mining magnate accused of corruption.
A senior U.S. official stated that Dan Gertler's royalties in the Democratic Republic of Congo should be directed to the country's government as a condition for any agreement that would alleviate sanctions on the billionaire mining magnate accused of corruption, Bloomberg reported.
The U.S. Treasury imposed sanctions on Gertler and more than 30 of his businesses in December 2017 and June 2018, accusing him of leveraging his friendship with former Congo President Joseph Kabila to secure lucrative mining deals.
Gertler struck a deal with Congo in 2022 to return some of his assets in exchange for help lobbying the US to lift the sanctions. However, he retained royalties in the world's largest sources of cobalt not owned by Chinese companies.
This development has complicated a US push for access to critical minerals independent of China, which Washington views as a top competitor and unreliable supplier. Gertler's continued presence in Congo has made Western firms reluctant to invest in his assets.
Amos Hochstein, a senior White House adviser on energy and investment, said in an interview that lifting the sanctions is necessary to open up the assets to new investments that support U.S. interests and benefit Congo and can be reinstated if needed.
What Hochstein said:
It's "very difficult to get a western company with high values to invest if they think there's a risk of litigation, sanctions and so on,"
"The royalties that he has should be in the hands of the government of the DRC," said Hochstein, who's been trying to broker a deal. "It's an entirely absurd situation that the state is not benefiting more from their own natural resources."
Hochstein didn't provide specifics on how to enforce the transfer, but it would likely involve buying out Gertler-a move that could avoid a legal battle but has angered civil society groups.
At the heart of the controversy are royalty streams from projects owned by Eurasian Resources Group and Switzerland's Glencore Plc, which can be worth about $100 million annually, according to Congo Is Not For Sale, a consortium of Congolese and international anti-corruption organizations.
Those groups have criticized a US plan that would allow Gertler to potentially sell those assets, alleging he obtained them through corruption and should return them for free. Bloomberg News has previously reported that the US would ease sanctions if Gertler sells his royalties, exits Congo, and submits to audits of his businesses.
"We have to make sure that the sanctions on Gertler are not becoming a punishment for DRC and against the overall interests of enhancing good actors from investing," Hochstein said.
Gertler hails from one of Israel's most prominent diamond families and has connections at the highest levels of the country's government. His sanctions were briefly lifted under President Donald Trump's administration in January 2020, when both men were using Alan Dershowitz as a lawyer. President Joe Biden reinstated the sanctions shortly after taking office.
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