HARARE – The United States is mum on its Treasury Department’s Office of Foreign Assets Control (Ofac)’s seizure of over $2 million destined to be transferred to Olivine from the PTA Bank.
The payment was for the recapitalisation of the oil and soap maker, which is majority owned by the Industrial Development Corporation (IDC), a designated entity on the US sanctions list.
Olivine is a fast-moving consumer goods manufacturing company which produces cooking oil, bakers fats, margarine, candles, bath soap, laundry soap, soya meal and cotton seed meal.
The company is a household name in Zimbabwe producing established brands such as Olivine cooking oil, Buttercup margarine, Jade bath soap, Perfection laundry soap, Dolphin laundry soap and Luna candles.
Ofac froze Olivine’s $2,1 million last month, and Zimbabwe has said the action constituted an “illegal act” and was using a “blocking order” to freeze assets without a warrant supported by probable cause.
But Sharon Hudson-Dean, the US Embassy spokesperson declined to comment on the seizure.
“Ofac does not comment on financial institutions’ Ofac compliance practices,” Hudson Dean said.
The seizure of Olivine’s funds comes hardly a month after Ofac has issued a general licence for two Zimbabwean banks: Agricultural Development Bank of Zimbabwe (Agribank) and Infrastructure Development Bank of Zimbabwe (IDBZ).
The general licence represents a suspension of sanctions on those banks, and permits American individuals and companies to engage in financial transactions with the two financial institutions.
Americans have been prohibited from doing this since 2008 when the banks were placed on the Specially Designated Nationals (SDN) sanctions list.
Hudson-Dean said the suspension of the measures on Agribank and IDBZ did not extend to IDC.
“Industrial Development Corporation is a designated entity under Executive Order 13469,” she said.
“Unlike Agricultural Development Bank of Zimbabwe and Infrastructure Development Bank of Zimbabwe it has not been licensed.”
IDC said in a statement Olivine was looking for $14 million of which $11 million was for raw materials and $3 million is for plant rehabilitation.
“This amount is expected to stimulate production and enhance capacity utilisation from the current 20 percent to 60 percent by year end,” the IDC statement said.
The US says it regularly reviews all of its targeted sanctions programmes, including the Zimbabwe programme and made clear its policy of meeting “action for action” in response to progress on the goals.
Zimbabweans set for themselves in the Global Political Agreement (GPA).
“We commend as a positive action the recent peaceful constitutional referendum in Zimbabwe,” said a US Embassy statement.
“Our policies reflect a continuing commitment to help the people of Zimbabwe restore the stable, peaceful, democratic country they rightly deserve and seek to support democratic institutions, rule of law, and human rights in Zimbabwe. We are prepared to consider further rolling back sanctions in response to positive progress on Zimbabwe’s part in meeting its reform commitments under the GPA and SADC roadmap.” – Gift Phiri, Political Editor