Archive for the ‘Zimbabwe Sanctions’ Category



Mugabe Leaves, Mnangagwa Arrives, Sanctions Remain

Posted by at 6:27 pm on November 27, 2017
Category: OFACSDN ListZimbabwe Sanctions

Emmerson Mnangagwa via [Public Domain - Work of USG employee]
ABOVE: Emmerson Mnangagwa

Last Tuesday, while you were thinking about the upcoming Thanksgiving holiday, Robert Mugabe, who has been dictator of Zimbabwe for the last 37 years, resigned.  Then while you were storming the doors of a local brick and mortar on Black Friday to cart off a new 4k flat screen TV, former Zimbabwean First Vice-President Emmerson Mnangagwa was sworn in as the new President, er, dictator of Zimbabwe.

So, you ask, whither the U.S. sanctions on numerous persons and companies in  Zimbabwe?  Here’s a hint:  Mnangagwa’s nickname is “The Crocodile” and he’s been Mugabe’s right hand man for years until the opportunity to replace Mugabe presented itself and Mnangagwa shoved him aside.  Here’s another hint:  Mnangagwa is, like Mugabe, on the SDN list, mostly for himself being knee-deep in everything that got Mugabe on the list and kept him there, including the notorious military massacre of the Ndebeles in Matabeleland.

The denial of bail for jailed political opponents of Mnangagwa, Ignatius Chombo and Kudzanai Chipanga, does not give much reason to hope that democratic reforms — a prerequisite to any sanctions reform for Zimbabwe — will occur in the near future.

Even though many of the member of Zimbabwe’s ruling class and associated companies and agencies are under sanctions, and will likely remain so for the near future, Zimbabwe is a major recipient of U.S. foreign aid, recently receiving $220 million from the United States. As you probably know, that could change if Mnangagwa is determined to have taken power through a coup. Section 508 of the Foreign Assistance Act, as continued through various subsequent appropriations bills, prohibits foreign aid to countries where a duly elected head of government is deposed by military coup or decree. Whether or not Mugabe was “duly elected” remains, I suppose, open to doubt, but even so State Department spokesman Heather Nauert declined to answer questions as to whether Mnangagwa’s takeover was even a coup. “I’m not going to take that bait,” was what she said to worm out of answering that question.

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Copyright © 2017 Clif Burns. All Rights Reserved.
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OFAC and Zimbabwe Bank Negotiating over Penalties

Posted by at 6:17 pm on October 30, 2017
Category: OFACZimbabwe Sanctions

CBZ Bank via [Fair Use]African media is reporting that the Office of Foreign Assets Control (“OFAC”) and CBZ Bank are in the process of negotiating over a jaw-dropping proposed penalty.  The penalty negotiations arise from CBZ’s allegedly having cleared U.S. dollar transactions for ZB Bank, a bank in Zimbabwe that appears on OFAC’s List of Specially Designated Nationals and Blocked Persons.

The charges by OFAC involve 15,127 violations, which led OFAC to write this in its initial penalty notice sent to CBZ in March:

Accordingly, the base penalty for the apparent violations equals the applicable schedule amount for each apparent violation, capped at US$250 000 per apparent violation, which in this case totals US$3,856,505,460.

The math here is a little whacked out for some reason since 15,127 times $250,000 is $3,781,750,000.  But what’s several hundred thousand dollars, more or less, when you’re talking Dr. Evil sized billion dollar amounts?  According to the press accounts, OFAC has already been bargained down to $385 million.  Of course, that is still a good chunk of the banks current total assets of $2.1 billion.

The transactions involved were allegedly all denominated in U.S. dollars.  Even so, the bank is trying to argue with OFAC that the transactions were “in-country” and therefore not subject to U.S. sanctions.  It’s not quite clear whether this is an argument that only transactions by CBZ with SDNs not in Zimbabwe may be sanctioned, an argument not likely to get much traction.  Or, alternatively whether this is an argument that no correspondent accounts in New York were used to clear the transactions, something that might have been possible for a few small transactions but not very likely for all 15,127 violations.

The better argument here, it seems, is that a $385 million dollar penalty against a bank with $2 billion in assets could cause a run on the bank and could harm ordinary people in Zimbabwe with accounts at the bank.  That, of course, assumes that the U.S. government cares about ordinary people in Zimbabwe.



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Copyright © 2017 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)



Zimbabwe’s Blocking Laws Lead to OFAC Fine

Posted by at 11:20 pm on February 9, 2016
Category: OFACZimbabwe Sanctions

Animal at Barclays by Gareth Milner [CC-BY-SA-2.0 (], via Flickr [cropped]The Office of Foreign Assets Control (“OFAC”) announced yesterday that Barclays Bank agreed to cough up $2,485,890 to settle charges that it dealt with parties blocked under the Zimbabwe sanctions. At issue were three parties that were not themselves on the SDN List but which “were owned, 50 percent or more, directly or indirectly, by” the Industrial Development Corporation of Zimbabwe (“IDCZ”).  Because IDCZ was put on the SDN List in 2008, the three parties at issue were blocked under OFAC’s 50 percent guidance.

The OFAC announcement offers a confusing description of how and why Barclays did not determine that the entities at issue were owned by blocked parties and were therefore themselves blocked. The story, such as it is, starts with OFAC noting that “local restrictions precluded Barclays from implementing measures for complying with economic sanctions, including sanctions screening, in Zimbabwe.” Because Barclays in Zimbabwe was legally forbidden to screen customers, Barclays did the screening in London, using electronic information which the Zimbabwe Barclays maintained but which, for some reason, did not include information beyond the name of the customer. As a result, Barclay’s processed transactions for the three IDCZ-owned customers from 2008, when IDCZ was added to the SDN List, until 2012, when a U.S. financial institution in the chain of the transactions blocked four transfers involving one of the three blocked entities. Even after Barclays NY conducted an investigation and determined that the customer was blocked as a result of the 50 percent rule, Barclays in London failed to upload that information into its screening filter until after four more transactions involving that customer had been processed.

It seems clear that Zimbabwe’s blocking laws played more than a casual role in the inability of Barclays to determine that the customers at issue were blocked due to the ownership interest of IDCZ. This is the first I’ve heard of Zimbabwe apparently making it illegal to screen parties against the U.S. list but, not surprisingly, OFAC is not going to be bothered with local laws (as we’ve seen before). OFAC does say that these local laws make it a non-egregious case but that, of course, did not mean that Barclays would escape getting its knuckles thwacked for $2.5 million by the agency. Apparently OFAC believes that the road to hell is paved with non-egregious actions.

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Copyright © 2016 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)



We Read the Zimbabwe Herald So You Don’t Have To

Posted by at 10:13 pm on October 13, 2015
Category: OFACZimbabwe Sanctions

U.S. Navy photo by Mass Communication Specialist 2nd Class Jesse B. Awalt/Released (, VIRIN 090202-N-0506A-310) [Public domain], via Wikimedia Commons
ABOVE: Robert Mugabe

The Zimbabwe Herald, the alleged newspaper and confirmed propaganda organ of the sanctioned Mugabe regime, is all excited by the launch of the China International Payment System (CIPS). The system, which was launched earlier this month, seeks to use SWIFT-formatted messages to facilitate cross-border payments in renminbi. Although the renminbi is the fourth most utilized currency for cross-border payments, it still only accounts for less than 3 percent of all such payments, making it doubtful that CIP will, at least any time soon, cause the renminbi to challenge the dollar, the euro or the pound sterling as an international currency.

So why are Mugabe’s minions so excited about CIPS? The headline says it all: China Unveils International Payment System – Checkmates Piracy of U.S. Treasury.” The image of OFAC flying a Jolly Roger over Treasury while the agency roams the seas, swigging rum and saying “Yo Ho Ho!” is, of course, a lively piece of propaganda right up there with that old chestnut “running capitalist dogs.” The story refers to sanctions on Zimbabwe as “illegal” no less than four times (for its slower readers) but fails to offer any theory of why exactly they are “illegal,” other than, I suppose, because Mugabe says so. (Dictators, naturally, have wide berth to say what is and isn’t legal.)

Of course, sanctions against Mugabe and his cronies and crony companies do make it difficult to engage in international trade given that the dollar constitutes about 45 percent of all such payments. Any dollar payment involving a sanctioned individual or company in Zimbabwe will be blocked the moment it hits a U.S. bank as it almost inevitably will. It’s doubtful that a renminbi payment system will provide any immediate or significant relief to Mugabe and company.

But I suppose everyone can dream, can’t they?  (I’m a Cubs fan, so I should know.)

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Copyright © 2015 Clif Burns. All Rights Reserved.
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Mugabe’s Scottish Castle in the Sky

Posted by at 6:16 pm on July 24, 2014
Category: Economic SanctionsOFACSanctionsZimbabwe Sanctions

By User:Bigwikiaal (Own work) [CC-BY-SA-3.0 (], via Wikimedia Commons

The Herald, a Mugabe mouthpiece owned by the Zimbabwean government, recently criticized former British Prime Minister Tony Blair in two articles for reported comments the UK made to justify the imposition of sanctions against Zimbabwe.  Referring to “illegal sanctions,” The Herald cited an article in the “Journal of African Studies” that quoted former South African president Thabo Mbeki as saying that UK officials told him, presumably sometime in the early 2000s, that Zimbabwean president Robert Mugabe owned a Scottish castle and had UK bank accounts that the UK intended to freeze, only to allegedly tell Mbeki later that the UK could not locate the Scottish castle or the accounts but still intended to impose sanctions in any event. (Perhaps the UK momentarily confused Mugabe with Idi Amin who once offered to be the King of Scotland.)

The article in question appeared in the June 2014 edition of the Journal of Southern African Studies and was by Blessing-Miles Tendi a frequent writer on UK-Zimbabwe relations and lecturer at Oxford.  Professor Tendi did in fact cite to a discussion he had with Mbeki in 2011, during which Mbeki said that “Britain” and “Tony’s people” made such statements about Mugabe’s assets and that the British later admitted to finding no castle in Scotland or Mugabe accounts in the UK.  Tendi went on to describe a UK decision to freeze Mugabe’s assets as “devoid of rationality” inasmuch as the UK knew these assets did not exist.  (Interestingly, Tendi also asserts that Mbeki claims that British plans to invade Zimbabwe were thwarted by Mbeki’s decision not to let Britain use South Africa as a staging point for the invasion.)

Tendi and The Herald are misinformed about the UK sanctions.  In addition to freezing any current or future Mugabe’s assets in the UK, the sanctions also prohibit anyone from making any economic resources available to Mugabe or his co-sanctioned cronies.  If the UK believed that Zimbabwe was engaged in human rights abuses and suppression of democracy, as most countries and international organizations still believe, it would not be “devoid of rationality” to conclude that prohibiting financial assistance and freezing future assets are warranted to end such abuses and suppression.

Although Tendi and The Herald are misinformed as to the scope of UK economic sanctions law, the more important take-away from this curious vignette is the allegation that a country like the UK may have hastily taken to other countries its case for sanctions, even in small part, based on its own misinformation.  Imposing economic sanctions on identified targets are swift government decisions with immediate effects that are many times based on information that the target itself can’t readily confirm or deny.  The only administrative due process afforded to a foreign sanctions target in the United States is an “administrative reconsideration” of OFAC’s decision by … OFAC.  As we noted earlier this year, OFAC reconsiderations are no easy task and some petitioners are taking claims to U.S. courts to obtain removal from the SDN list.  Although Mugabe does not have a strong case for reconsideration and not likely to make one, other sanctions targets may, and should at least try, if the circumstances warrant.


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Copyright © 2014 Clif Burns. All Rights Reserved.
(No republication, syndication or use permitted without my consent.)