(NEWZIMBABWE) US adds diamonds firms to sanctions List

US adds diamonds firms to sanctions List
12/12/2011 00:00:00
by Staff Reporter

THE United States has added Mbada Diamonds and Marange Resources to the list of companies sanctioned under its Zimbabwe Democracy and Economic Recovery Act (ZIDERA).

The US Treasury’s Office of Foreign Assets Control (OFAC) said it had updated its "specially designated" nationals list to include the two companies, which operate diamond mines in Zimbabwe’s Marange fields.

The listing extends to any assumed names the companies might operate under, including Block Wood Mining and Condurango Investments.

The development follows the recent decision by the Kimberley Process to allow diamond exports from the Marange Resources and Mbada Diamonds respective mines despite reports of human rights abuses associated with the operations.
The United States backed the lifting of the ban saying it was a “necessary compromise”.

Marange Resources and Mbada Diamonds both operate their Marange mines in a joint venture with the Zimbabwe Mining Development Corporation (ZMDC), a state owned company which was already on the OFAC list.
U.S. citizens are prohibited from dealing with individuals or companies on the expansive list.

Foreign investors in Zimbabwe's diamond-mining sector must, by law, have a 50 percent partner - the ZMDC, which holds the 667-square-kilometer Marange concession area and selects joint-venture partners to erect diamond mines alongside a thriving small-scale sector.

However, until now, only the ZMDC appeared on both the U.S. (and European) sanctions list and, according to U.S. law, a company that is 50 percent owned by a sanctioned company is itself also regarded as a sanctioned company.

Another diamond mining company operating in Marange, the Chinese-owned Anjin, which was also recently given KP approval to export its rough diamonds, was not included on the updated OFAC Specially Designated Nationals (SDN) list.

Meanwhile, as part of its enforcement efforts, OFAC publishes a list of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries and lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific.

Industry experts say sanctions make it virtually impossible to conduct U.S. dollar transfers to Zimbabwe to legally pay for purchased diamonds, or to secure insurance coverage on diamond shipments, or even to get the courier services to pick up goods that were legally bought with duly signed KP certificates.

The United States imposed sanctions on the under its Zimbabwe Democracy and Economic Recovery Act of 2001 over allegations of electoral fraud and human rights abuses.
The sanctions were expanded, in 2008, by President George Bush and further extended by President Barack Obama

The Zimbabwe government says the sanctions are unjustified and needlessly worsening the plight of ordinary people.