Maravi

(TALKZIMBABWE) The 'truth' about Zimbabwe diamond money

The 'truth' about Zimbabwe diamond money
By: Tendai Midzi
Posted: Sunday, March 20, 2011 5:44 am

THE paradox of the Zimbabwe diamond industry is that while Zimbabweans, especially sanctions-deniers, expect their lives to be improved using the proceeds from the diamond sales, they do not call for the West to lift sanctions against Zimbabwe, which are undermining that industry.

Zimbabwe's mining companies, especially state-owned ones, have to find ways to trade without being subjected to United States and European Union sanctions. Unless this happens, all the arguments about accountability for diamond revenue will remain hot air.

Accountability, in this instance, means opening up Zimbabwe's economy to vultures that would impose further sanctions inorder to drive President Mugabe out of power.

The United States keeps tabs and tightens screws on financial transactions linked to the entities that are profitable in Zimbabwe, especially those involved in the diamond mining industry.

Those who deny the existence of sanctions, on one hand, cannot demand accountability from government regarding the revenue, on the other.

This is simpy hypocrisy. The government has to find means and ways to navigate these US-EU measures if diamond revenue is to reach all Zimbabweans.

The danger, however, is that these "means and ways" could be exploited to enrich individuals. This is the outcome that those who call for sanctions should be prepared to accept.

Accountability will only occur in a sanctions-free environment, where the dictates of the market rule.

Companies like the Zimbabwe Mining Development Corporation (ZMDC) and the Minerals Marketing Corporation of Zimbabwe (MMCZ), two major companies in the diamond and other mineral trade, are on the US-EU illegal sanctions list. How can they be accountable in this environment?

Recently, about $2-million deposited in South African-owned Stanbic Bank was frozen by the US Federal Reserve working in collaboration with the country's Office of Foreign Assets Control (OFAC).

This measure was effected because the US imposed sanctions on Zimbabwe in 2001 through the now discredit Zimbabwe Democracy and Economic Recovery Act (ZDERA). This Act was renewed earlier this month by US President Barack Obama.

The US also went ahead and froze Stanbic Bank accounts held by ZMDC and MMCZ.

A letter written by ZMDC chairman Godwills Masimirembwa to Mines Minister Obert Mpofu, dated February 7 and marked "private and confidential", reveals that government is experiencing problems in receiving its diamond revenue.

The letter, titled Inflows to the Fiscus from Mbada Diamonds and Marange Resources for the January 2010 to February 2011, says it has been difficult for Zimbabwe to "move, transfer and receive" its diamonds proceeds due to US sanctions.

"Delays in receiving payments are being caused by the illegal sanctions imposed by the US against Zimbabwe. For no payment can be made direct to MMCZ, ZMDC and/or their subsidiaries due to the sanctions. If this is done America will confiscate the money through its OFAC," Masimirembwa wrote to Mpofu.

"How is this confiscation effected? All USD (US dollar) payments by telegraphic transfer are routed through New York, America. ZMDC, MMCZ and their subsidiaries are under sanctions. So any telegraphic transfer to any of these entities will be blocked and retained by the US."

These US measures are wreaking havoc to Zimbabwe's diamond sales and payment system.

"Where it not for the delays caused by the illegal sanctions, ZMDC, MMCZ and their subsidiaries would receive payments within 48 hours of the conclusion of sales," but this is simply not the case at the moment.

British-owned Standard Chartered Bank in Harare recently refused to process financial transactions involving ZMDC and China Uranium Corporation, saying the local company was on the sanctions list. The companies wanted to embark on uranium mining project, but the US thwarted the deal by blocking the transfers of capital.

The MDC-T and their friends elsewhere in the country and outside cannot continue to demand accountability in diamond sales, when in broad daylight they deny the existence of sanctions.

They cannot demand to know the whereabouts of the $313-million from diamond revenue, when they support illegal sanctions, that make that accountability possible.

Mpofu says he gave Finance Minister Tendai Biti $174- million in diamond revenue, but Biti denies it. This is indeed the confusion that the sanctions bring, and sooner or later, the MDC-T will have to accept the chaos brought by the sanctions they have supported for so long.

Those in the MDC-T who deny the existence of sanctions and demand accountability for diamond revenue should ask the US OFAC and Federal Reserve where Zimbabwe's $2-million deposited in South African-owned Stanbic Bank is.

Biti's role in the inclusive Government will continue to be undermined by sanctions and his frustration will grow. He is the middle person between the Zimbabwean government and the West, and the two will continue to make his life at the Treasury unbearable.

___________________
Tendai Midzi writes from the UK. He can be contacted via Tendai Midzi writes from the UK. He can be contacted via tendaimidzi1@yahoo.com

Labels: DIAMONDS, SANCTIONS, TENDAI MIDZI

posted by MrK @ 7:28 PM