Zimre Holdings deleted from OFAC’s sanctions list
HARARE – The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) has deleted Zimre Holdings from its list of Specially Designated Nationals.
Zimre was placed on the sanctions list in 2008 (when Government was still a majority shareholder), at the same time as ZB Holdings for allegedly supporting and funding the Zanu PF government. ZB was removed from the list last year in October.
US persons are prohibited from dealings with individuals and entities that are named on OFAC’s SDN List. In addition, a licence is required to export items subject to the EAR to any of the entities named to the Entity List. A violation of U.S. sanctions can result in both criminal and civil enforcement in the United States as was seen with the fine handed to a hedge fund last year.
The embargo placed on Zimre severely undermined its operations. Firstly, it’s efforts to attract investors were hampered as even investors from outside the US are generally afraid to cross its paths. Resultantly, through a rights issue, which was to be subject of several discussions, the Zimre was taken over by a consortium fronted by the Rudlands. Secondly, the sanctions affected the company’s ability to get business from regional customers as some of the wired funds would bounce back. It also undermined Zimre’s capabilities to pay claims while companies associated with it would also face difficulties.
Zimbabwe will be closely watching how the new administrations to be headed by Donald Trump will handle its relations with the country but with pending elections in 2018 it is highly unlikely that these would thaw. There is hope, however that some of the state-linked companies which remain on the list will be deleted.