STATEMENT OF 
ALEX VINES
SENIOR RESEARCHER
HUMAN RIGHTS WATCH

BEFORE THE HOUSE ARMED SERVICES COMMITTEE
SPECIAL OVERSIGHT PANEL ON THE MERCHANT MARINE

VESSEL OPERATIONS UNDER "FLAGS OF CONVENIENCE" AND NATIONAL SECURITY IMPLICATIONS

JUNE 13, 2002
 

Flags of Convenience and the Illicit Arms Trade

Mr. Chairman and members of the oversight panel, I would like to thank you for giving me the opportunity to speak on the subject of maritime trade.  I have worked for the New York-based Human Rights Watch for the last decade, during which time I have conducted a number of in-depth investigations into violations of United Nations (U.N.) sanctions and how such violations were funded.  Prior to this I worked at Control Risks, a leading London-based international political risk consultancy.  In April 2001 I was permitted a leave of absence by Human Rights Watch to join the five-member U.N. panel of experts on Liberia established under Security Council Resolution 1343 (2001).  This year I served again on a second Liberia panel established under Security Council Resolution 1395 (2002) until April 11, 2002.  I testify before you on behalf of Human Rights Watch, but also with the benefit of the insights gained from being a former member of the Liberia panel of experts.

According to the U.S. Office for Naval Intelligence, 90 percent of all world freight is maritime trade and large amounts of weapons are transported by sea.  The sheer size of this trade makes effective inspection for illegal arms trafficking and other illicit activities difficult, but not impossible.  Overstretched port authorities, coast guards, and government security agencies not checking holds properly are part of the problem.  Falsely declared cargo is a favorite method for concealing weapons.  Human Rights Watch has recorded incidents where weapons have been declared as car parts, agricultural equipment, tractor parts, and even as “fragile items.” Since September 11, there has been increased interest in the role of flags of convenience in the illicit trade of weapons. 

Many cases in Human Rights Watch’s files on transportation of illicit weapons to human rights abusing parties were by flags of convenience.  Many ships use such flags to save costs, but also because arms dealers and their networks involved in this trade want to avoid scrutiny.  Some flags of convenience provide ideal cover for setting up front companies.  The operators also exploit weak controls on transport.  They often file false manifests and submit fraudulent documents while sailing improperly registered ships to ply their trade.  A few cases from HRW’s files illustrate these problems.

Sri Lanka’s Liberation Tigers of Tamil Eelam (LTTE – the “Tamil Tigers”) is one of the few non-state armed actors to have a significant maritime fleet at its disposal.  This fleet was built up from the mid-1980s with the help of a Bombay shipping magnate.  The fleet is reported in a 1999 Commonwealth Human Rights Initiative report to have at least ten ships, flying mostly under the Panamanian, Honduran, or Liberian flags of convenience.  These ships tend to be crewed by Tamils and are owned by various front companies located in Asia.  Much of the trade appears to have been legitimate but an estimated 5 percent has been arms and ammunition destined for the conflict. 

One such vessel, according to the Commonwealth Human Rights Initiative, the Honduran registered M.V. Swanee or Swene, sailed from the Ukraine to northeastern Sri Lanka carrying fifty tons of TNT and ten tons of RDX explosives to the LTTE.  These explosives were used in a suicide bombing on January 31, 1996, of the Central Bank of Ceylon building in Colombo, which killed approximately 90 people and injured another 1,400.

The most dramatic recent example of a flag-of-convenience ship being used for gunrunning was in January 2002 when the Tongan-flagged general cargo ship the Karine A was seized in the Red Sea carrying fifty tons of arms and explosives, which Israel said was bound for Yasser Arafat's Palestinian Authority.  Two months later another Tongan-flagged vessel, the Monica, was apprehended by the French navy while trying to transport 1,000 asylum seekers to Italy.

In May the Tonga flag of convenience was blacklisted from major western ports, according to Reuters and Lloyds, an early casualty of an international effort to clean up the high seas.  The Tonga registry, launched in 2000, is run from the Greek port of Piraeus and has about 200 ships under its flag.  After the flag was blacklisted, Tonga closed its maritime registry.  One of the main port state control authorities at the front line of contemporary ship safety regulation, the Paris Memorandum of Understanding (MOU), said that the registry is due to be blacklisted until it closes in April 2003. 

The most difficult ships to monitor for illicit shipments are those that are not owned by an offending rebel group or state, but by privately owned freight companies using a flag of convenience.  The U.N. panel of experts for Liberia, convened to examine violations of U.N. arms and diamond sanctions, and travel bans on Liberia, noted that during its investigations there were persistent reports of ships unloading weapons.  The panel investigated 105 shipping movements to Monrovia Freeport and Buchanan port in 2000 and 2001, but was unable to obtain irrefutable evidence of illicit arms trafficking.  Ships under the flags of Antigua, the Bahamas, Belize, Cambodia, the Cayman Islands, Croatia, Cyprus, Denmark, France, Germany, Greece, Ghana, Lithuania, Malta, Norway, Panama, the Philippines, Russia, South Korea, Thailand, Togo, Turkey, and the U.S visited these ports.  While many of these shipments will have been involved in legitimate trade, some may have carried illicit arms shipments in breach of the U.N. embargo.  Only five of the shipping movements to Liberia recorded were ships under the Liberia flag. 

There were a number of suspicious incidents related to unloading of cargo from three separate Panamanian-, Belizean-, and Norwegian-registered ships at Buchanan in 2001.  Their activities in Liberia were characterized by heightened security, unloading at night, and the intimidation of curious locals that raised suspicion of sanctions busting, but were not irrefutable proof.

Ship owners or crews are also known to have changed the names of their vessels while at sea.  In 1993 an international warrant was issued for a cargo of arms aboard the Maria, a vessel registered in Greece.  The ship’s owners changed the name to Malo while the vessel was at sea, but it was later apprehended in the Indian Ocean by the Seychelles authorities.  According to the U.N. International Commission of Inquiry (UNICOI), some of the weapons from this shipment reached the perpetrators of the Rwandan genocide.  In 1996 authorities were tipped off by sources in Thailand about another Tamil Tiger vessel, the Comex-Joux 3, which was carrying a cargo of arms, ammunition and explosives.  The cargo was intended to replenish arsenals that had been depleted in fighting for the control of Jaffna in late 1995.  The consignment was shipped through Phuket and while on route the vessel was renamed the Horizon.  It was, however, sunk in February 1996 by Indian and Sri Lankan navy action.

Common methods used to hide the destination of illicit cargoes are filing multiple destinations or using multiple ships.  An arms prosecution was opened in Gdansk, Poland in 1998, for illegal arms deals from 1992-1996.  The criminal investigation found that surplus weapons were packed on ships supposedly heading for legitimate destinations, such as Latvia and Estonia, but ended up in illegal destinations such as Somalia and Croatia.  For example, U.S.$2 million worth of cargo left Gdynia harbor in 1992, supposedly for Latvia.  However, only 300 AK-47 assault rifles with U.S.$49,000 worth of ammunition were delivered to Latvia, according to the prosecutor.  The remaining items all disappeared.  Investigators later found that the arms were reloaded onto a different ship off the coast of Somalia.  In another case, only 50,000 rounds of ammunition worth U.S.$14,000 were delivered to Latvia of a shipment consisting of 18 million rounds worth about U.S.$1.3 million.

More recently, in February 2001, a shipment of 636 tons of Russian weapons traveled from Oktyabrsk, Ukraine, to Angola.  We know about this shipment because the Georgian- registered Anastasia was detained when it arrived in the Spanish Canary Islands because the ship’s captain had declared the cargo as car parts.  Initially, it was suspected that the weapons were destined for the Angolan rebel group, the National Union for the Total Independence of Angola (UNITA), but the Angolan government confirmed that the shipment was theirs.  The shipment included 20,000 boxes of ammunition, mortar grenades, fuses, and night vision equipment of Russian origin.  Further investigation showed that the ship was owned by a prominent Ukrainian national and crewed by Ukrainians, but was falsely registered as a Georgian vessel.  After this incident, the Ukrainian owners re-registered the ship under the Cambodian flag of convenience and renamed it Emir. 

The Anastasia/Emir is an interesting case.  This ship was not a regular supplier of weapons to the Angolan government.  Some Western intelligence agencies believe that antipersonnel mines were also on board the ship when it docked in the Canaries, though this has not been confirmed.  If it were, then this would be contrary to the 1997 Mine Ban Treaty, to which Spain, Ukraine, and Angola are signatories.  The ship was reported by one Western law enforcement agency to have stopped off the West African coast, raising suspicion that it might have unloaded part of its cargo onto smaller coastal vessels destined for Liberia.  Again, this has not been confirmed and obtaining proof in such cases can be extremely difficult, although satellite tracking of suspected ships could help.

Illicit arms traffickers rely on weak controls in arms-exporting countries and the glut in the arms market to ensure them access to a wide range of military equipment at competitive prices and with few questions asked.

Flags of convenience offer a high a level of corporate secrecy.  Registering a company or a ship can be very easy.  Obtaining a Liberia flag, for example, takes only a couple of days and does not require disclosure of share ownership or the names of the applicant company’s directors.  There is no requirement for any annual reports or audits.  Such a system is attractive for gunrunning, where the real owner of a particular ship is hard to identify and therefore difficult to hold accountable.

The trade, of course, depends on the ability of clients or their patrons to pay, whether in cash or precious gems or—as the Liberia panel found was the trend in Liberia—through direct bank transfers to arms traffickers from government accounts or those of private business interests allied to the government. 

Liberia’s weapons purchases from 1999 to 2001 were mainly financed by off-budget spending by the Liberian government, or payments made from revenue that bypassed the central bank and was therefore not accounted for in the budget.  In particular, income received from the U.S.-based Liberian International Shipping and Corporate Registry (LISCR) was used to pay for illegal arms shipments.  After LISCR ceased the practice in August 2000, other off-budget outlays of maritime funds were utilized.  Such off-budget spending also has been used elsewhere to avoid scrutiny of military expenditures.[1]  

The Liberian Sanctions  

The October 2001 and April 2002 reports of the U.N. Liberia panel of experts presented evidence of violations of an arms embargo and travel and diamond bans imposed on Liberia by the Security Council.  In the case of weapons flows, these reports revealed that the arms embargo imposed in 1992 on Liberia had been flouted with alarming regularity during the period from mid-1999 to mid-2002 and illustrated the channels through which arms were smuggled.  It built on the work of a U.N. investigative panel on Sierra Leone, which noted in a December 2000 report that rebels of the Revolutionary United Front (RUF) in Sierra Leone had obtained arms via Liberia, in violation of arms embargoes on both parties.  The Liberia arms embargo was initially established following the outbreak of renewed fighting in that country’s 1989-1997 civil war and kept in place as insecurity persisted and spread beyond Liberia’s borders.

The 1992 arms embargo on Liberia was replaced with a new, tighter embargo in March 2001, intended to curb arms trafficking via Liberia to the RUF, in response to the Sierra Leone panel’s December 2000 report.  The embargo on the provision of arms and military assistance to the territory of Liberia also encompasses the rebel Liberians United for Reconciliation and Democracy (LURD) group that opposes the Liberian government.  The RUF, whose forces have committed horrific atrocities, has itself been under an arms embargo since 1997.  Both embargoes have failed miserably, with devastating human consequences. On May 6, 2002, the U.N. Security Council extended the 2001 embargo for a further twelve months.

The Liberia Flag of Convenience

Liberia has hosted a U.S.-based maritime shipping registry since 1949.  A U.S-based company has always run the registry and many companies regarded the registry as a de facto second U.S. registry, but a far cheaper one than the official U.S. registry.  The first commercial ship was registered in March 1949 and the registry was administered by International Registries, Inc. (IRI), of Virginia, U.S., until 1999.

During the 1970s, the Liberian registry grew to approximately 75 million tons.  Liberia held the number one position for shipping tonnage registered under its flag until 1994 when it was overtaken by Panama.  Liberia today has the second largest maritime fleet in the world.  In April 2002, its gross tonnage stood at 54,545,000 (29,191,000 net).  There were 1,715 vessels registered under its flag.  The registry has traditionally had a high proportion of tanker tonnage.  In January 2001, Liberia accounted for 35 percent of all the world’s oil tankers. 

The register is widely seen as one of the quality flags of convenience with the fleet having a relatively low average age and below average Port State Control (PSC) detention rate.  The casualty figures are also low.  Liberia appears on all White Lists (approved), including the International Maritime Organization and all port state control authorities worldwide.

Source of Revenue for Monrovia

In recent years, the prime concern has not been the technical quality of the registry but what happens to the money generated from it.  From 1949 to 1999, the registry earned around U.S.$700 million for the Liberian government.  During the 1990-1996 civil war in Liberia and during the interim period following that war, revenue from the registry represented some 90 percent of the Liberian government’s total income.

When President Charles Taylor came to power in Liberia in 1997, he sought to obtain control of the registry.  During the civil war he had failed to raise funds from IRI for his war effort.  In December 1998, an agreement was signed by the Liberian government to set up LISCR, and a U.S. law firm was registered under the United States Foreign Agent Registration Act to act on behalf of Liberia.

The Liberian government appointed LISCR as its exclusive agent to manage the corporate and maritime registers with effect from January 1, 2000.  This contract is for ten years with a provision for renewal.  LISCR is based in Vienna, Virginia, and it is at this location that ship safety, inspection, compliance, manning, and accident-and-incident investigation are managed.  LISCR has a New York office, where Liberian ship registrations and ship mortgage recording usually take place.

LISCR is meant to retain approximately 66 percent of the fee income of the corporate register to cover operating costs and profit while the remainder is paid to the Liberian government.  LISCR retains 20 percent of tonnage tax fees, while 60 percent of the total income generated by the registers is retained by LISCR, 5 percent is paid as dues to the International Maritime Organization, and the rest is paid to Liberian government.  The registry generates around U.S.$18 million a year for Liberia, which is distributed to the government in accordance with the agreement between LISCR and the Liberian government.  LISCR’s operation is annually audited, until recently by Arthur Anderson.  Collections are initially deposited into one of several registry bank accounts.

Diversion of Funds

However, the U.N. panel found that this standard procedure was not always followed. Bank transfer details for two LISCR transfers to SAN Air General Trading at Standard Chartered Bank, Sharjah, United Arab Emirates, for U.S.$525,000 on June 21, 2000, and U.S.$400,000 on July 7, 2000, were for arms and transportation in violation of U.N. sanctions.

SAN Air was found by the U.N panel to be the main company behind sanctions-busting to Liberia.  It is an agent for Centrafrican Airways, the main company of international sanctions-buster Victor Bout. 

LISCR admitted to the U.N. panel that it had made four payments to non-government accounts in 2000.  The disbursements followed written requests from the Liberian government’s commissioner of maritime affairs.  According to LISCR, they became increasingly uncomfortable about these requests, and, following a further request on August 17, 2000, informed the commissioner of maritime affairs that they would no longer diverge from standard procedure.  Since then, the U.N. panel has not found evidence of LISCR’s funds being used for illicit arms procurement.

Accounting for the Maritime Revenue in Monrovia

According to official documents of the Bureau of Maritime Affairs, the Liberian government’s portion of the funds collected directly by the LISCR program are deposited directly into a government account that is operated exclusively by the minister of finance and not the commissioner.  Then the BMA is supposed to be allocated 10 percent of these funds to support its operational budget, the Ministry of Foreign Affairs should receive 6 percent, and the Ministry of Information 4 percent.

The U.N. panel investigations proved that both these claims were false.  In fact, funds were remitted directly to a tripartite account held at the Ecobank in Monrovia.  The commissioner of maritime affairs and the minister of finance are signatories with a third determinational signatory controlled by the Executive Mansion – the Liberian presidency.

The U.N. panel found that the BMA did not feature in the payroll status of the Ministry of Finance (March 9, 2002), and that in the government’s Bureau of the Budget’s budget for July 1, 2001, to June 30, 2002, the BMA fell under the Government of Liberia Special Commitment – a budget line of the Executive Mansion.

Following a recommendation by the International Monetary Fund (IMF), in October 2001 the Liberian authorities directed that government bank accounts be moved from commercial banks to the Central Bank of Liberia.  The Bureau of Maritime Affairs, however, still maintains its own three-signatory account.

This makes tracking what happens to the money once it reaches the BMA difficult – the more so, because Liberia’s Auditor General last audited the Bureau of Maritime Affairs only in 1988.  When the U.N. panel tried to examine the accounts of BMA in April 2002, it was not able to do so.  The panel was informed that a generator had broken down and that it would be repaired only after the panel had left Liberia.

In September 2000, following an IMF staff visit to review the January-June 2000 Staff Monitored Programme (SMP), the IMF expressed concern about the shortfall in maritime revenue and wrote that “the continued decline in maritime inflows is troublesome and should be reviewed closely so that remedial measures can be taken if necessary.” In December 2001, IMF again noted after its Article 4 consultations that reported payments from the shipping registry to the government differed from collections at the Ministry of Finance by some U.S.$2 million, reflecting deductions at source by the BMA or timing differences in the transfer of funds from offshore accounts.  Table 2 shows a further U.S.$4 million discrepancy between the funds received by the Ministry of Finance and those recorded by the Central Bank of Liberia during 2001.    

Maritime remittances recorded between September 2001 and February 2002 as received by the Ministry of Finance (U.S.$6,255,771) more or less matched what LISCR reported as having remitted (U.S.$5,781,885).  The main problem with the Liberian shipping and corporate registry is what happens to the money once it is transferred to an account controlled by the Liberian government.

The Bureau of Maritime Affairs and its Long History of Sanctions Busting

The BMA was officially granted autonomous status in June 1989 through a Liberian Act of Legislature.  The commissioner, officially, is the only senior official appointed by the president of Liberia, although, in fact, the head of state also makes other appointments.  For example, Agnes Taylor, a former wife of President Taylor, was appointed by him as Liberia’s permanent representative to the International Maritime Organization and as a Liberian deputy maritime commissioner in London.

The BMA was embroiled in a sanctions-busting scandal prior to the investigations of the U.N. panel of experts.  On February 5, 1998, U.S. customs seized a Hummer armored vehicle with a value of U.S.$146,260, in Savannah, Georgia.  The vehicle, which was fitted with a hardened point for attaching a weapon, was due to be exported to Liberia via Cote d’Ivoire without an export license in breach of U.S. law and in contravention of U.N. sanctions on Liberia.

On February 12, 1999, the British Foreign and Commonwealth Office asked the Liberian government to waive Cooper’s diplomatic immunity so that he could be questioned about these transactions, but the Liberian government declined to do so, its London embassy stating that Cooper had acted in an “official capacity.” On July 8, 1999, the British government declared Cooper persona non grata.  Since his expulsion from the United Kingdom, Cooper has continued to be associated with LISCR.  The latter did not investigate Cooper’s past before hiring him, but acknowledged that they were “aware that he had to leave the United Kingdom under a cloud, but do not know exactly why.”  

In addition to Gerald Cooper’s efforts to break the arms embargo in 1998 and 1999, the U.N. panel found that Sanjivan Ruprah, who traveled on two Liberian passports as a deputy commissioner of maritime affairs, played an important role in violating the arms embargo in 2000 and 2001.  Ruprah used two different diplomatic passports issued to him by the Liberian government, one in his correct name and one under the false name Samir Nasr.  The U.N. panel also found a document showing that Ruprah had signed letters as deputy commissioner, on BMA letterhead. 

The U.N. panel also documented in detail how Commissioner of Maritime Affairs Benoni Urey assisted Ruprah’s sanctions-busting efforts, notably by arranging payment for them from the BMA’s funds and providing logistical support.  Urey, however, has continued to deny to the U.N. panel that he was involved in any wrongdoing. 

The U.N. panel concluded in its October 2001 report that Liberia’s commissioner of maritime affairs and the BMA were “little more than a cash extraction operation and cover from which to fund and organize off-budget expenditures, including for sanctions-busting, and that the funds would need to be protected from Bureau misuse.”

Diamonds and the Liberian Corporate Registry  

Commissioner Urey, among his other interests, has invested in diamond concessions in Liberia.  Two retired U.S. generals associated with the maritime agents have also been involved in unofficial diamond transactions.  While working for IRI, one of these retired generals sponsored a diamond broker but was caught at Roberts International Airport in Liberia with undeclared rough diamonds in 1999, according to the U.N. panel.

The corporate registry, part of the responsibility of the shipping agent, has also been used for diamond transactions.  The panel of experts on Sierra Leone documented how numerous non-resident corporations used the Liberian corporate registry as a convenient cover for their transactions of smuggled diamonds.  This practice has declined following the imposition of a U.N. embargo on the export of Liberian diamonds.

The corporate registry has also been used for other illegal activity.  The U.N. panel on Liberia found that a broker who smuggled 1,000 submachine guns from Uganda to Liberia was acting through Culworth Investment Corporation.  Culworth joined the registry in 1992 and paid its annual bills until 1997.  It became operational again in 2000 around the time of the Uganda-to-Liberia sanctions-busting venture.  It was an off-the-shelf company used at a particular time to provide cover for sensitive business.

Reaction to the U.N. Panel of Experts Reports

The publication of the two U.N. panel of experts reports (S/2001/1015 of October 26, 2001) and (S/2002/470 of April 19, 2002) has heightened international attention on how the Liberian flag of convenience is run and what happens to the funds it generates.  Although LISCR feared that there would be client flight from the registry, LISCR only saw a decline of nineteen ships from its books between October 2001 and April 2002.

The U.N. panel in its October 2001 report recommended that the U.N. Security Council committee should set up an escrow account for all revenues generated from the shipping and corporate registry.  It also encouraged the IMF and the government of Liberia to reach an agreement to audit these funds and to designate those funds for development purposes. 

The Liberian Ministry of Finance acted quickly and on November 23, 2001, announced that it would audit and ring-fence the shipping and corporate registry.  On receipt of income from the registry, the Ministry of Finance would channel the funds through the Central Bank of Liberia and would segregate those funds for infrastructure, social, health, and welfare development and support programs.

This was followed on December 3, 2001, by a letter from the Ministry of Finance to the IMF requesting assistance to set up a financial monitoring mechanism.  The IMF replied on December 14, welcoming the initiative, but ruled that it was enterprise specific and therefore outside the IMF’s mandate.  The Ministry of Finance and LISCR then approached the nongovernmental anti-corruption group Transparency International for assistance, but Transparency International also turned down the request on the grounds that such an exercise was outside its mandate.  However, they recommended that the ministry approach Crown Agents, a United Kingdom–based company that specializes in port management, auditing and project management.

On May 6, 2002, the U.N. Security Council passed Resolution 1408 (2002) that called for an audit of the revenues derived from the shipping registry.  It is the first time that the Security Council has required an audit.  The relevant portion of the resolution calls for:

[T]he Government of Liberia to take urgent steps, including through the establishment of transparent and internationally verifiable audit regimes, to ensure that revenue derived by the Government of Liberia from the Liberia Shipping Registry and the Liberian timber industry is used for legitimate social, humanitarian and development purposes, and not in violation of this resolution, and to report back to the Committee on the steps taken and results of such audits not later than three months after the date of adoption of this resolution.

Crown Agents may undertake the audit and is close to signing a contract with the Ministry of Finance following the groundbreaking Security Council resolution.

Conclusions

Flags of convenience offer a high level of corporate secrecy and are easy to obtain.  Some flags appear to be particularly inviting for illicit arms trade networks.  Overstretched port authorities, coast guards, and government security agencies that are unable or unwilling to adequately inspect cargo holds are part of the problem.  Falsely declared cargo is a favorite method for concealing weapons and the sheer size of this trade makes effective inspection difficult, though not impossible. 

Accurate information on ship owners, their shareholders, and the nature of their business are important.  This nature of business needs much more transparency.  The International Maritime Organization could play a greater role in promoting transparency but has to date lacked the political will to do so. 

The Liberia registry raises a different problem.  The technical quality of the flag is respected but the host country is under U.N. sanctions.  Two U.N. expert panels have documented that funds from the Liberian flag have been used to pay for transportation and weapons in breach of U.N. sanctions.  A company on the Liberia corporate registry (also managed by the shipping agent) was also used to front one of these sanctions-busting operations and, according to the U.N. panel, Liberia’s Bureau of Maritime Affairs was the nerve center for this operation. 

An independent audit of the funds received by the Liberian government will be conducted.  But the audit will only be as effective as its terms of reference allow.  This audit should be retroactive to 1997 and publicly available for independent scrutiny.  Security Council Resolution 1408, which supports the audit, refers only to the “Liberia Shipping Registry.”  This is a potential loophole, as LISCR runs both the Liberia shipping and corporate registries, and they are linked.  The U.S. should ensure that both sources of revenue fall under the Security Council resolution’s mandate and are subject to an internationally verifiable audit regime.

The Liberian government also still needs to ensure that the BMA has its bank account only at the Central Bank of Liberia in order to ensure transparency regarding its use of shipping revenue.  Although the Liberian government announced in October 2001 that this would be done, it has taken no action to date to comply with this promise to the IMF.