Zimbabwe: a further relaxation of the EU financial sanctions regime

In our earlier post we commented on the EU's first step towards easing its sanctions regime in relation to Zimbabwe: with effect from 21 February 2013, twenty one individuals and one entity were removed from the EU’s list of designated persons, and the travel ban imposed on six members of the Government was suspended.   The EU has now suspended the effect of the asset freeze as it applies to eighty one additional individuals and 8 entities.  This briefing summarises these most recent changes.

The new measures were introduced by Council Regulation (EU) No 298/2013 (amending Regulation (EC) No 314/2004, the principal Zimbabwe sanctions Regulation) which took effect on 29 March 2013 (the "March  Regulation").

By contrast to the changes in February, the most recent revision to the designated persons list takes the form of a suspension of the asset freeze regime, rather than a complete removal of the named individuals/companies from the list.  The March Regulation provides for a suspension of Article 6 of the 2004 Regulation (which imposes the freeze and prohibits the provision of funds or economic resources to designated persons) until 20 February 2014.  It also provides for the suspension to be subject to review every three months.  This appears to be an increasingly popular way to effect the liberalization of sanctions regimes – a suspension approach was also adopted last year in relation to bulk of the EU's Myanmar regime.

The suspension covers the majority of the persons designated under the Zimbabwe financial sanctions regime.  Just ten individuals, including President Robert Mugabe, and two companies, including the state-run Zimbabwe Mining Development Corporation ("ZMDC"), remain on the sanctions list.  

Belgian Foreign Minister, Didier Reynders, has indicated that the EU is likely to lift sanctions on ZMDC within a month of the Zimbabwe election, expected in July 2013, unless all member states agree that "the election have not been peaceful, transparent, credible or they have reasonable grounds to believe ZMDC has been involved in activities undermining democracy during the election".

This latest development has been criticised by rights campaigners who have pointed to alleged intimidation by security officials during the public consultation to draft the new constitution; there will no doubt be further lobbying in connection with the lifting of the residual aspects of the sanctions regime, and the continuation of the suspension.

In the interim, businesses should continue to exercise caution in relation to dealings in Zimbabwe and take appropriate steps to ensure compliance with the applicable sanctions regimes.  For those using HM Treasury's 'current regime list' to sanctions screen, this was updated on 5 April 2013 to remove the persons benefitting from the suspension.