Sunday, March 13, 2011

US freezes Zimbabwe diamond money

ABOUT US$2 million realised from sales of local minerals and deposited locally into a Stanbic Bank account has been frozen by the United States’ central bank, the Federal Reserve, on the grounds that the two account holders — Minerals Marketing Corporation of Zimbabwe (MMCZ) and Zimbabwe Mining Development Corporation (ZMDC) — are under US sanctions.

This puts paid to claims by that sanctions are "targetted at individuals" in President Robert Mugabe's government.

The MMCZ and ZMDC employ hundreds of employees whose livelihoods depend on their viability.

Of that money, more than US$1,5 million belonged to MMCZ and about US$300 000 was deposited into the ZMDC account.

The money was transferred by the Zimbabwe Chamber of Mines through a Stanbic Bank telegraphic transfer (TT) and wired by the bank to the US.

Stanbic Bank operates a nostro account, maintained by an overseas bank, where bulk transfers are first sent before they reach their local recipients. Through that arrangement, Stanbic Bank instructs its overseas bank to transfer the money to a local bank but that money first goes through the Federal Reserve.

A US government arm, the Office of Foreign Assets Control (Offac), which is used by that government to implement the illegal sanctions on Zimbabwean parastatals, is said to have recommended the freezing of the funds.

In 2001 the US imposed the so-called Zimbabwe Democracy and Economic Recovery Act (ZDERA). It is an illegal piece of legislation as it was not imposed by the United Nations.

All payments associated with companies on the illegal sanctions list risk having their funds frozen.

ZMDC chairman Godwills Masimirembwa confirmed that his company had lost more than US$300 000 in gold sales proceeds.

The Chamber of Mines is said to have transferred the money from Jena and Sabi Gold Mines through its Stanbic Bank’s Samora Machel Branch to ZMDC’s BancABC account.

“Through the US’s Offac, our money was frozen because we are on the sanctions list,” said Masimirembwa.

He said the sanctions were so dire that payments for minerals were difficult to institute directly to ZMDC.

“We get paid normally in US dollars. Our customers cannot pay us directly.

“We need to consistently sell our diamonds. Once the sanctions are removed, the country can realise more than US$85 million per month from that,” he said.

Stanbic Bank legal adviser Aisha Timba could not comment on the issue yesterday and referred all questions to the financial institution’s managing director, Mr Joshua Tapambwa, who could not be reached for comment.

Other companies on the sanctions list are Agribank, the Industrial Development Corporation of Zimbabwe (IDC), the Infrastructure Development Bank of Zimbabwe (IDBZ) and ZB Bank.

Jongwe Printing and Publishing, M & S Syndicate, Zidco Holdings, the Zimbabwe Iron and Steel Company (Zisco) and Zimre Holdings are also under the illegal sanctions.

Together, these companies employ over 10,000 people. These are all affected by the illegal embargo. These companies are also some of the biggest companies in the country, in turnover and their viability, or lack thereof, has a huge impact on the economy.

Civil servants in Zimbabwe have been pushing for proceeds from the diamond industry to be channeled to improving their salaries and working conditions.

Finance Minister Tendai Biti and Prime Minister Morgan Tsvangirai from the pro-sanctions party, the MDC-T, have remained mum on these issues.

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