Canadian company accused of 'knowingly' breaking Sudan arms embargo

A United Nations panel that monitors sanctions in Sudan has accused a Canadian company of deliberately skirting the long-standing arms embargo against that country with the 2012 sale of more than two dozen armoured vehicles, CBC News has learned.

The condemnation of the Streit Group, which has a plant in Innisfil, Ont., is contained in an unpublished, confidential report that has been kept secret at the UN.

Excerpts of the report have been obtained by CBC News from high-level international sources. Its findings accuse Streit and the United Arab Emirates, which helped facilitate the 2012 sale, of knowingly breaking the arms embargo imposed over a decade ago against Sudan.

The sanctions prohibit the export of weapons to Sudan and rendering technical assistance related to arms. 

But the allegation being made by investigators, who are working for the monitoring panel, is that Streit supplied unarmed armoured cars knowing that machine guns and other weapons would be put on them by Sudanese authorities, in a process known in the arms trade as diversion.

'Streit supplied the armoured vehicles to Kamaz on the basis of an end-user certificate that it would almost certainly have known did not reflect the true end user of the vehicles.' – Unpublished UN panel report on Sudanese arms embargo

Streit is owned by Canadian businessman Guerman Goutorov.

Publication of the full UN Security Council panel report was put on hold by Russia last spring for reasons unrelated to arms trafficking, said one of the sources with knowledge of the file who could not speak publicly.

3rd UN condemnation of firm 

It's the third time the Canadian company has been singled out by the UN. Human rights groups have claimed Streit's business dealings have inflamed civil wars in several African countries — an allegation the company strenuously rejects.

Sales of hundreds of unarmed Cougar and Typhoon armoured personnel carriers to both South Sudan and Libya also drew rebukes from expert UN panels monitoring sanctions on those countries.

The Liberal government has said those sales, facilitated through the United Arab Emirates, fall outside of Canada's arms control regime — but, nonetheless, it referred a UN report on Libya that criticizes Streit to the RCMP for review.

The Mounties have not said whether they will launch a formal investigation into this latest case or the previous allegations of sanctions-busting in Libya, something that startles a human rights lawyer.

Streit says it cannot be responsible for modifications made to its Typhoon armoured carriers after their export. (CBC)

Last week, the Globe and Mail reported that the Mounties have included allegations about the Sudan transaction in their review.

"The language we're getting from the RCMP and Foreign Affairs that they haven't decided to launch an investigation is really splitting hairs," said Paul Champ. "There is a very low threshold for the RCMP to launch an investigation. I find it quite surprising they're trying to step away."

Champ said he believes there's more than enough information on the public record for the RCMP to launch a formal criminal probe into whether sanctions, which Canada has pledged to uphold, were violated.

The RCMP would not comment.

A spokesman for the federal government declined to comment on the excerpts.

"Global Affairs Canada cannot comment on unpublished reports," said Michael O'Shaughnessy in an email. "This matter was referred to the RCMP. As with any police matter, it would be inappropriate to discuss further details."

Pointed allegations

The excerpts from the report on Sudan — a country with one of the worst human rights records in the world — are blunt in their denunciation of Streit, the United Arab Emirates and the companies that acted as middlemen in the sale of 30 Typhoon armoured vehicles in the spring and summer of 2012.

Those companies are Kamaz International Trading and Wadi Al-Neel Clearing and Forwarding.

'We cannot influence this process, but any unapproved modifications made – including addition of weaponry – will invalidate the warranty.' – Streit Group statement on South Sudan made to CBC News on Aug. 23, 2016

In order to sell the unarmed heavy vehicles in a conflict zone, the companies and a country's export authorities have to be satisfied the vehicles won't be converted to weapons of war and that the so-called end-users — in this case the Sudanese police — were legitimate. They also must obtain an exemption from the UN.

The panel was withering in its findings.

"Streit supplied the armoured vehicles to Kamaz on the basis of an [export permit] that it would almost certainly have known did not reflect the true end user of the vehicles," said the unpublished report, which was leaked to CBC News.

The findings also suggest that Kamaz officials lied to panel investigators. They told them they had not issued export permits for the Sudan sale, even though UN researchers claim they had already uncovered the copies of the documents signed by the company.

Internally displaced school children eat from the same bowl during a feeding program provided by the World Food Program at the Abushouk camp in Al Fasher in North Darfur, Sudan, November, 2015. (Mohamed Nureldin Abdallah/Reuters)

The report goes on to accuse the U.A.E. government, Kamaz and Wadi Al-Neel of obstructing the panel's investigation; not obtaining UN permission for the transaction; and, more seriously, of selling vehicles to Sudan without proper certification and guarantees they wouldn't be used in Darfur. The country's long-suffering western region is where local militia and government troops have carried out a scorched-earth campaign of genocide.

Kamaz and Wadi Al-Neel were asked for comment, but not did not respond.

Human rights activists in the region say the Streit vehicles were outfitted with machine guns and used in combat.  

A spokesman for Streit declined to comment on the latest allegations.

Report suppressed

The company has in the past denied wrongdoing, saying it has complied with all U.A.E. export laws and that export permits did not pass through its hands. Streit said it is not responsible for modifications made to its unarmed vehicles after they are in the hands of the buyer.

"We cannot influence this process, but any unapproved modifications made — including addition of weaponry — will invalidate the warranty," the company told CBC News last month in response to questions over its activity in South Sudan.

Moscow put a hold on the report's release last March, sources told CBC.

Russia and other nations demanded some details involving the Sudanese gold trade be redacted because they linked the industry to violence in Darfur.

Last month, Russia asked for an extension to the hold, but was turned down.

The report's release now awaits the appointment of a new expert panel to oversee sanctions against Sudan. The old one was effectively dissolved after Russia refused to extend the contracts of its members.