CBZ escapes OFAC sanctions

01 Sep, 2020 - 11:09 0 Views
CBZ escapes OFAC sanctions CBZ chief executive officer Peter Zimunya

eBusiness Weekly

Business Writer

CBZ Holdings, has been cleared by the United States of America’s (USA) Department of Treasury’s Office of Foreign Assets Control (OFAC) of having to pay a $385 million penalty for flouting that country’s sanctions regime against Zimbabwe.

After reviewing over 15,000 transactions by CBZ Holdings Ltd. for ZB Bank Ltd. between 2009 and 2014, OFAC said in a letter on August 24 that it was no longer going to imposed the punitive measures on the bank.

The bank was, however, warned to exercise due diligence with all its transactions and that it shall remain on OFAC radar.

The allegations against CBZ stemmed from claims that between 2009 and 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 – a copy of which has been obtained by this publication, OFAC chief of Regulated Industries Oversight and Evaluation Rachel Dondarski, said investigators scrutinised over 15 000 transactions.

“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.

OFAC chief of Regulated Industries Oversight and Evaluation Rachel Dondarski

“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.

The Central Africa Building Society

(CABS) has re-opened six branches which were closed last month to allow for disinfection after staff members tested positive for novel Coronavirus.

In a statement, the bank said it had re-opened its Kwekwe, Mutare, Chitungwiza, Arundel, Borrowdale and Avondale branches that had been closed.

CABS closed the six branches and ordered all its workers to go for Polymerase Chain Reaction (PCR) tests and self-isolation for 14 days, as a precautionary measure.

In view of the continuing prevalence of Covid-19, CABS encouraged its customers to user internet and mobile banking platforms more to reduce the risk of exposure to the pandemic.
In Zimbabwe, over 6 000 people have been infected, and fatalities exceed 100.

“We would like to remind you to observe social distancing each time you visit the branch and to adhere to the precautionary measures that have been put in place for your safety,” CABS said.

Some of the companies and institutions that also reported positive cases of Covid-19 among staff include Edgars, Econet, OK Zimbabwe, Federal Express, Cimas, PSMAS, National Social Security Authority (NSSA), Infrastructure Development Bank of Zimbabwe (NSSA), Pick ’n Pay, Avenues Clinic and the Parliament of Zimbabwe.

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