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Ministers silent on Terrafame owner's suspected money laundering links

Banks had been closely monitoring financial flows by Terrafame part owner Trafigura for years, a new data dump revealed.

Kaivosyhtiö Terrafamen tehdasalue
In 2017 the government said that Trafigura had been thoroughly vetted before it was accepted as a minority owner for Terrafame. Image: Niko Mannonen / Yle

As of Monday morning ministers in Finland had declined to comment on a financial data leak indicating that a minority owner of state-owned mining outfit Terrafame, is suspected by US officials of money laundering.

The information is part of a leak of more than 2,500 documents, many of which were files sent by banks to US authorities, revealing how the international banking system has been used to launder money worldwide.

The firm in question, Trafigura, joined the troubled state-owned mine as an investor in 2017, amid widespread media reporting on its alleged ties to Russia, suspected tax evasion and toxic waste scandals.

At the time, then-Economic Affairs Minister Mika Lintilä (Cen) offered assurances that the firm's background had been vetted by the government of the day. In an Yle interview Lintilä said that external consultants had also been hired for the due diligence, but he did not disclose the firm, citing trade secrecy.

However when approached by Yle about the freshly-leaked data, Lintilä, who still holds the Economic Affairs portfolio said that Terrafame’s operations are the responsibility of Labour Minister Tuula Haatainen (SDP). The Labour Ministry told Yle that Haatainen would not comment on the matter.

On Sunday evening, Haatainen said on Twitter that the ministry will “familiarise itself with the questions arising in public relating to Terrafame’s minority owner Trafigura.”

"After that the ministry will comment on the matter from the perspective of ownership steering," Haatainen tweeted.

Yle asked Lintilä about the analysis that was prepared in 2017 when the Singapore-based commodity trader came forward as an investor in Terrafame. Lintilä's response was, "I don’t remember anything about the entire report," the minister said.

No comment from Trafigura

Trafigura has operations in dozens of countries and owns roughly 30 percent of Terrafame’s mining operation in eastern Finland.

Yle’s investigative programme MOT and the US-based news site Buzzfeed asked Trafigura for comment and an interview about the money laundering suspicions. However it declined to comment, even on a general level.

"Thank you for your email. We do not wish to comment on the matter in any way," the company’s communications head wrote in an email.

"Couldn't Finland find a better partner?"

Switzerland-based NGO Public Eye has investigated Trafigura for years. Andreas Missbach, who heads up the organisation's commodities unit, said that he was surprised that a Nordic country like Finland decided to do business with Trafigura.

"Couldn’t Finland find a better partner? Trafigura has had joint ventures with African states and their activities have always had questionable features," Missbach said.

When Trafigura took a stake in Terrafame in 2017, it stressed that it had changed its practices and that there was no danger of scandal. Missbach said this kind of talk was a mere fig leaf.

"Trafigura has used vast sums of money to polish its public image and the company has a strong desire to break with its past. Trafigura has also made some genuine improvements. But its fundamental practices have not changed," Missbach said.

Missbach said that bank notifications about Trafigura’s suspicious financial transfers did not surprise him.

"What’s most interesting is that the banks have flagged the transfers of funds. On the one hand while banks’ internal controls might consider Trafigura’s actions to be suspicious, another unit in the same bank might still grant the company large loans. It seems that the right hand doesn’t know what the left hand is doing," he concluded.

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