Agribank and the Infrastructure Development Bank of Zimbabwe (IDBZ) have now been fully removed from the US sanctions list, the American Department of the Treasury has announced, allowing them to do international business more easily and obtain lines of credit.
The two banks were put under US sanctions in July 2008. In April 2013 sanctions were partially lifted by the issuance of a licence permitting business with the two banks subject to limitations. In February 2016 they were removed from the sanctions list, but the licence requirements remained. These have now been removed with effect from today by the Office of Foreign Assets Control of the US Treasury.
Finance and Economic Development Minister Professor Mthuli Ncube told journalists during a post-Cabinet briefing in Harare last night that “any removal of any institution, especially a financial one, is very positive indeed. This will help the bank access credit lines and remove any restrictions that pertain to Know-Your-Customer challenges, which is really what happens when a bank is in the spotlight. Now that they (sanctions) have been lifted, the banks will find it easier to do business going forward. So this is a very welcome development indeed.”
In particular, by being taken off all sanctions lists, many of those who were reluctant about doing business with Agribank and IDBZ will now feel it is safe to deal with them. Under general international rules, other banks and businesses were reluctant to have any dealings, even permitted dealings, with the two because they were worried about falling foul of the Know-Your-Customer rules.
Foreign Affairs and International Trade Minister Dr Sibusiso Moyo said the lifting of sanctions on the two banks was “a progressive and welcome development that is as a result of us finding each other’s chemistry between Zimbabwe and the US”.
He said Zimbabwe was looking forward to further progress in terms of lifting sanctions on other entities in the country. The minister said Zimbabwe had moved from a point where the two countries were not talking to a point of dialogue. He hoped that the sanctions would eventually be lifted as the country pursued its re-engagement initiatives.
Pan African Chamber of Commerce board member Mr Langton Mabhanga said the gesture by the US was welcome but said there was “still
more to be done” but said Agribank can now “fully enjoy its legal persona as an agricultural bank”.
“The bank can now access lines of credit with international monetary institutions especially the agriculture-specific facilities. This will also enable the bank to directly move money to and from the markets, hence cutting the premium charged on its transactions.
“Agribank can now access any market. All these put together, the farmer is the winner. We urge the US to walk much faster in this very direction of undoing the sanctions.”
Businessman Mr Busisa Moyo said the removal of the requirement for an Office of Foreign Assets Control (OFAC) licence for foreign transactions involving the two banks was “good news”, adding that Zimbabwe’s agriculture and construction sectors now have a fighting chance for expansion and employment creation. OFAC usually has the authority by means of a specific licence to permit a person or entity to engage in a transaction which otherwise would be prohibited.