Liberia denies busting sanctions

Liberia is being punished for supporting Sierra Leone's rebels

Liberia's maritime authority has reacted with disbelief to a UN report which says money from the country's shipping activities is been used to finance gun-running, saying his activities were "completely transparent".

The Commissioner for Maritime Affairs, Benoni Urey told the BBC's Focus on Africa programme that even the opposition groups inside the country were "comfortable" with the handling of money obtained from the country's shipping operations.

Liberia receives millions of dollars every year by registering more than 1,000 ships under its flag

The report which is expected to be debated by the UN Security Council on Tuesday was commissioned to look into whether Liberia has violated UN embargos imposed in May to punish the government for supporting rebels in Sierra Leone.

The report recommended that additional sanctions be imposed on Liberia claiming it was still involved in supplying arms to the rebels.

Escrow account

The 135-page " name and shame" report said that as Liberia was channelling funds from its shipping activities and timber exports to finance gun-running operations, a bank account supervised by a UN agency should be set up.

This account would be supervised by a UN agency and the money used for development projects in Liberia.

But Mr Urey said: "It is our right to decide what we do with our money. They cannot tell us that they would take the money of the government of Liberia and put it in an account controlled by the International Monetary Fund (IMF).

But the Liberian rebel group Lurd welcomed the report saying revenue accrued from shipping and the country's timber is not used for the benefit of ordinary Liberians.

Under the sanctions regime, diamond exports from Liberia were banned in an effort to halt the smuggling of gems from rebel-held areas in Sierra Leone.

illegal transfers

Liberia had always called the sanctions unjust and had said it would cooperate with the UN, as its information was based on hear say.

The UN report, released on Monday, acknowledged that the diamond trade through Liberia has largely been curbed.

Reuters news agency reports doubts that the Security Council will impose a ban on the country's shipping and logging industries.

It says Secretary General Kofi Annan last month warned that more sanctions would hurt ordinary Liberians most.

Liberia and Sierra Leone have been fighting a proxy war through various rebel groups for several years.

The Liberian Government said it had taken comprehensive measures to comply with the UN's demands.

The RUF have been accused of killing, raping and mutilating civilians over the last decade.

Escape

Liberia has yet to recover from its disastrous civil war in the early 1990s, and is already under an arms embargo stemming from its 1989-1996 civil war.

Taylor has always said sanctions are unjust

It receives millions of dollars every year by registering more than 1,000 ships under its " flag of convenience."

This means that ship owners, who may only have a post box in Liberia, could escape strict maritime regulations.

It also means that they could pay less taxes and fees as well as operate looser labour and safety laws.