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Ishemunyoro Chingwere Business Reporter
Zimbabwe’s biggest financial services provider, the Commercial Bank of Zimbabwe (CBZ), has been cleared of any wrong doing by the United States of America’s (USA) Department of Treasury’s Office of Foreign Assets Control (OFAC) on allegations of flouting that country’s sanctions regime on Zimbabwe.
The clearance means that the financial services provider has been spared from a punitive penalty amounting to US$385 million.
The allegations against CBZ stemmed from claims that, for a number of years leading to 2014, the bank had clandestinely facilitated thousands of transactions on behalf of ZB Bank, which was under US economic sanctions then.
While a conviction for CBZ would have left them worse off financially, it also would have dented the bank’s standing on the global financial village and thus affect Zimbabwe’s economic performance in general.
In a letter to CBZ chief executive officer Peter Zimunya dated, 24 August 30, 2020 – a copy of which has been obtained by this publication, OFAC chief of Regulated Industries Oversight and Evaluation Rachel Dondarski, said investigators had found no evidence of wrongdoing against CBZ.
“This letter serves as notice that the Department of the Treasury’s Office of Foreign Assets Control (OFAC) has completed its review of the following matters,” wrote Dondarski to the CBZ CEO.
“From the information gathered OFAC has determined that for a number of years, up to and including 2014, CBZ appears to have engaged in non-transparent payment practices and processed thousands of transactions to or through the United States in apparent violation of Article 541.201 of the Zimbabwe Sanctions Regulations, 31 C.F.R. part 541 (ZSR).
“Specifically, CBZ provided indirect access to the US financial system for ZB Bank, a bank located in Harare, Zimbabwe that OFAC added to its List of Specially Designated Nationals and Blocked Persons (the “SDN List”) on July 25, 2008,” reads the letter.
Despite having escaped the heavy fine and sanctions that would have been occasioned by a guilty verdict, CBZ was, however, cautioned and “urged” to be thorough in its business to avoid flouting the sanctions regime.
“After considering all relevant information in its possession as well as the General Factors Affecting Administrative Action set forth in the Economic Sanctions Enforcement Guidelines, OFAC has made a determination to issue you this cautionary letter in response to these apparent violations,” wrote the OFAC official.
“We urge CBZ to use greater caution to ensure that it does not process transactions in violation of the sanctions programmes administered by OFAC.
“This cautionary letter represents a final enforcement response to the above-referenced apparent violations. However, it does not preclude OFAC from taking future enforcement action should new or additional information warrant renewed attention,” reads the letter.
While CBZ have had a reprieve, the OFAC letter brings to the fore the fact that Zimbabwe remains under US economic sanctions radar despite spirited attempts by Washington to label them as targeted measures.
The New Dispensation under President Mnangagwa has also been a reengagement overdrive that is meant to return Zimbabwe to the country of nations and thus get on a pedestal for economic revival.
Online Reporter