International Trade Law News

The Canadian Government last week imposed targeted sanctions on Zimbabwe. These sanctions, which are being implemented through the Special Economic Measures (Zimbabwe) Regulations, include the following restrictions:

• Ban on the export of arms and related material to Zimbabwe or to any person in Zimbabwe;
• Prohibition on the transport of arms and related material to Zimbabwe aboard a Canadian vessel or aircraft;
• Prohibition on the provision of technical or financial assistance or services relating to arms and related material, including the provision, transfer or communication of technical data, to Zimbabwe or any person in Zimbabwe;
• Requirement on any person in Canada and Canadian outside of Canada to freeze the assets of listed Zimbabwean persons and entities;
• Prohibition on Zimbabwean aircraft from flying over or landing in Canada.

Under these regulations, the Canadian Government can approve a list containing the names of persons for which there are reasonable grounds to believe that they are connected with the Government of Zimbabwe or persons or entities engaged in activities that seriously undermine democracy, respect for human rights and the rule of law in Zimbabwe. The Regulations also provide a review mechanism to remove names from the schedule upon receipt of a petition from a designated person.

The U.S. has imposed an arms embargo on Zimbabwe since April 17, 2002 and other economic sanctions administered by OFAC on the Mugabe regime since 2003.

Labels: Canada, Zimbabwe

President Bush today issued an Executive Order (EO) expanding the scope of U.S. sanctions on Zimbabwe. The EO states that the recent actions and policies of the Government of Zimbabwe and other persons to undermine Zimbabwe's democratic processes or institutions "warrant an expansion of the existing national emergency and the existing sanctions with respect to Zimbabwe."

Among other things, the EO expands the list of specially designated nationals in Zimbabwe to include senior officials of the Government of Zimbabwe and companies owned or controlled by, directly or indirectly, the Government of Zimbabwe or an official or officials of the Government of Zimbabwe.

As a result of the EO, the U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) today designated the following Zimbabwean parastatals and entities that are owned or controlled by the Government of Zimbabwe:

• Minerals Marketing Corporation of Zimbabwe (a.k.a MMCZ), the sole marketing and export agent for all minerals, except gold and silver, mined in Zimbabwe;
• Zimbabwe Mining Development Corporation (a.k.a. ZMDC), involved in investment in the mining industry in Zimbabwe, and in planning, coordinating and implementing mining projects on behalf of the Government of Zimbabwe;
• Zimbabwe Iron and Steel Company (a.k.a. ZISCO), Zimbabwe's largest steel works;
• Agricultural Development Bank of Zimbabwe (a.k.a Agribank), a commercial bank owned by the Government of Zimbabwe;
• Industrial Development Corporation of Zimbabwe Ltd, a state-owned enterprise that owns a large number of companies operating in the industrial sector, including the chemical, clothing and textiles, mineral processing, and motor and transport sectors;
• Infrastructure Development Bank of Zimbabwe, a financing entity; Zimre Holdings Limited, an investment and reinsurance entity;
• ZB Financial Holdings Limited, a holding company for a group of companies involved in commercial and merchant banking and four subsidiaries of ZB Financial Holdings Limited: ZB Bank Limited (a.k.a Zimbank), ZB Holdings Limited, Intermarket Holdings Limited, and Scotfin Limited.

Also designated today by OFAC were:

• Thamer Bin Saeed Ahmed Al-Shanfari, an Omani national with close ties to Mugabe and his top officials, as well as his company, Oryx Natural Resources.
  
• OSLEG (a.k.a. Operation Sovereign Legitimacy), an enterprise that is a commercial arm of the Zimbabwean army representing its interests in the DRC and elsewhere, and which is controlled by various senior officials in Zimbabwe.
• Divine Homes, a property company whose Chairman is SDN David Chapfika, Zimbabwe's Deputy Minister of Agriculture;
• COMOIL (Pvt) Ltd., a petroleum importing company, owned by SDN Saviour Kasukuwere, Zimbabwe's Deputy Minister of Youth Development and Employment Creation;
  
• Famba Safaris, a registered Zimbabwean safari operator, whose Director and major shareholder is SDN Webster Shamu, Mugabe's Minister of State for Policy Implementation.
  

As a result of Treasury's action, any assets of the individual and entities designated today that are within U.S. jurisdiction must be frozen. U.S. persons are also prohibited from conducting financial or commercial transactions with the individual or entities.

Labels: OFAC, Zimbabwe

Zimbabwe's Sunday Mail newspaper has reported that the Zimbabwe government "has begun auditing the ownership of Western firms in the country as part of a black empowerment drive' and to counter the possible withdrawal of investment under sanctions imposed and proposed by Britain and the U.S.'"

The preliminary results of the audit indicated that 499 companies in Zimbabwe had British ownership while 353 companies companies were owned by shareholders from other European countries.

Meanwhile, this week Zimbabwe will introduce a 100 billion Zimbabwe dollar bank note, as the country's inflation rate reached 2.2 million percent.

Labels: Sanctions, Zimbabwe

On Friday, a U.N. Security Council resolution intended to impose sanctions against Zimbabwe's Mugabe regime failed when two of the 15-member body's permanent members – China and the Russian Federation – voted against the measure.

The resolution would have imposed a multilateral arms embargo on Zimbabwe, as well as a travel ban and financial sanctions against President Mugabe and 13 senior government and security officials considered most responsible for the crisis. (The U.S. has imposed an arms embargo on Zimbabwe since April 2002 and financial sanctions since March 2003)

The resolution would have determined, under Chapter VII of the United Nations Charter, that the situation in Zimbabwe posed a threat to international peace and security in the region, and would have demanded that the country's government immediately cease attacks against and intimidation of opposition members and supporters, while beginning a "substantive and inclusive political dialogue" between the parties with the aim of arriving at a peaceful solution that "reflects the will of the Zimbabwean people and respects the results of the 29 March elections."

The Russian Federation vetoed the measure only days after supporting the G8 statement at the Japan summit recommending that financial and other sanctions be taken against the Zimbabwe regime.

Labels: United Nations, Zimbabwe

The leaders of the G8 nations agreed today at their Hokkaido Toyako, Japan Summit to seek additional sanctions against the Mugabe regime in Zimbabwe.

The statement released by the G8 leaders states that: "We will take further steps, inter alia introducing financial and other measures against those individuals responsible for violence."

Labels: Sanctions; Sudan, Zimbabwe

In response to the recent events in Zimbabwe, the Government of Canada announced today that it will immediately put in place a series of measures to severely restrict its relationship with the Government of Zimbabwe. These measures include:

• Imposing restrictions on travel, work and study on senior Zimbabwean government, military and police officials and their families.
• Summoning the Ambassador of Zimbabwe to Canada to convey messages to her home government.
• Reconfirming its long-standing policy against exporting military goods to Zimbabwe.
• Not allowing any aircraft registered in Zimbabwe to land in, or to fly over, Canada.

In addition, the Government of Canada is encouraging Canadian companies to voluntarily divest from Zimbabwe.

The U.S. currently imposes targeted sanctions on the Mugabe regime and others found to have been undermining the democratic processes or institutions in Zimbabwe. These parties are indicated by the designation "[Zimbabwe]" on OFAC's Specially Designated Nationals (SDN) List. In addition, Zimbabwe has been subject to a U.S. arms embargo since April 17, 2002. It is widely expected that the U.S. will impose additional sanctions on Zimbabwe in the near future.

Labels: Canada, Zimbabwe

The An Yue Jiang, a vessel carrying arms from China to land-locked Zimbabwe, has apparently been ordered to return to China after being denied entry into ports in Mozambique, South Africa and Tanzania. The vessel was reportedly carrying three million rounds of AK-47 ammunition, 1,500 rocket-propelled grenades and more than 3,000 mortar rounds and mortar tubes destined for the Government of Zimbabwe.

In response to reports that China intends to fly the arms into Zimbabwe once the vessel returns to China, a State Department spokesman said today that:

In terms of the possibilities that it would be transported through other means, that is not something that I have heard. Certainly, though, the same thing applies: It’s not the method of transportation; it’s the fact that at this point in time, we don’t think it’s a good idea for anyone to be introducing additional weaponry into Zimbabwe, and certainly would hope that everyone that had contact with the Zimbabwean Government would encourage them to do the right thing in terms of releasing electoral results, honoring the will of the people, and being able to move forward with a transition to the results of that election.

For background and current information see Nowhere to Hide for Mugabe's Ship in the online edition of South Africa's The Times newspaper.

Labels: China, Zimbabwe

The Treasury Department's Office of Foreign Assets Control (OFAC) imposed new sanctions today on two Zimbabwean entities and two individuals that, according to OFAC, "contribute to the undermining of democratic processes and institutions in Zimbabwe".

Today's designations include ZIDCO Holdings, a financial owned by the Zimbabwe African National Union (Patriotic Front), the political party of President Robert Mugabe. The ZANU-PF's publishing arm, Jongwe Printing and Publishing Company was also designated by OFAC. Both ZIDCO Holdings and Jongwe Printing and Publishing Company are owned or controlled by the Mugabe regime that have already been designated by OFAC.

Also named today are Happyton Bonyongwe and Leo Mugabe. Mr. Bonyongwe is the Director of Zimbabwe's Central Intelligence Organization (CIO), and is considered Zimbabwe's "spy chief." Leo Mugabe is a Member of the Zimbabwe Parliament and the nephew of Robert Mugabe.

These designations were made pursuant to Executive Order 13391, which prohibits U.S. persons, wherever located, or anyone in the United States from engaging in any transactions with any person, entity or organization found to: 1) be undermining democratic institutions and processes in Zimbabwe; 2) have materially assisted, sponsored, or provided financial, material, or technological support to these entities; 3) be or have been an immediate family member of a sanctions target; or 4) be owned, controlled or acting on behalf of a sanctions target. As a result of Treasury's designations, any assets of these individuals and entities that are within the United States or in the possession or control of any U.S. person must be blocked, and U.S. persons are prohibited from dealing with them.

Labels: OFAC, Zimbabwe

As noted above, I recently returned from a trip to Zimbabwe. While a trip to spectacular Victoria Falls (the Smoke That Thunders) should be high on your travel "to do" list, the country is a mess due to the policies imposed by long-time leader Robert Mugabe. Zimbabwe's current claim to fame is the world's highest inflation rate, which is running at an annual rate of 1,700% and is predicted by the IMF to rise to 5,000%. Zimbabwe also has the third highest unemployment rate.

While the U.S. currently imposes targeted financial sanctions on the Mugabe regime, there is growing support for other countries, particularly those in Africa, to impose targeted sanctions on the Harare government. The Democratic Alliance, an opposition party in South Africa, today called for the Government of South Africa to "immediately end its quiet diplomacy and enact smart sanctions against Zimbabwean President Robert Mugabe, all members of his family and members of his government" and that the South African Government should "should stop 'pussy-footing' around the deepening humanitarian crisis in neighbouring Zimbabwe."

Labels: OFAC, Sanctions, Zimbabwe