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Gauteng High Court asking the court to declare US sanctions on Zimbabwe illegal and unconstitutional

by Staff reporter
15 Mar 2022 at 16:14hrs | Views
The Zimbabwe Anti-Sanctions Movement is asking the court to declare US sanctions illegal and unconstitutional.

In a potentially ground-breaking international case, a group called the Zimbabwe Anti-Sanctions Movement (ZASM) on Friday filed papers in the Gauteng High Court asking it to declare US sanctions against Zimbabwe unlawful, unconstitutional and invalid.

If successful, the case could see the beginnings of normalised financial relations with South Africa's northern neighbour. South African and international banks are reluctant to deal with Zimbabwe, even in cases where this is not explicitly prohibited, for fear of incurring heavy penalties from the US.

Among those cited as respondents are the US President, President of the US Senate, Speaker of the House, Treasury Secretary and several US and South African banking groups. The US banks cited in the case are Citigroup, Bank of America, Goldman Sachs, Morgan Stanley and Wells Fargo. Also cited are South African banks Absa, Standard Bank and FirstRand.

The court action in South Africa comes as the US and its allies impose sweeping sanctions against Russia and Russian companies over that country's invasion of Ukraine. The US has drawn fire from human rights activists for targeting ordinary Russians as reports of anti-Russian xenophobia sweep parts of the West.

Read: Oil pushes higher after US escalates Russia sanctions with ban

The ZASM court application says sanctions applied by the US on Zimbabwe prejudices ordinary Zimbabweans by denying the country access to international credit markets, and by cutting off international aid and donor assistance. South African banks such as FirstRand, Standard Bank and Absa are afraid to conduct business with Zimbabwe due to the risk of incurring civil and criminal penalties.

"South African financial service providers, as a result of the United States sanctions on Zimbabwe, have deprived Zimbabwean nationals and companies with money (property) due to them, and withheld financial services, in order to comply with the unilateral economic sanctions imposed by the United States," reads the court application.

The ZASM quotes Zimbabwe's richest businessman, Strive Masiyiwa, pointing out the perverse effects of sanctions on ordinary Zimbabweans. When presented with initiatives that could create tens of thousands of jobs, foreign investors and banks say they are afraid of violating sanctions and incurring massive penalties.

US sanctions were introduced in 2001 under the Zimbabwe Democracy and Recovery Act (Zidera) with the purpose of restoring order in the country after state-sanctioned land invasions and human rights abuses. The US restricts Zimbabwe's access to international financial markets pending compliance with a range of electoral and human rights reforms, including the establishment of a biometric voter roll in both digital and paper formats, allowing opposition parties full access to state media, as well as a full accounting of diamond revenues since 2000. The law also requires Zimbabwe to embark on a process of national reconciliation and to compensate victims of human rights abuses.

A 2019 report by Zimbabwe's Ministry of Foreign Affairs and International Trade detailed the impact of these sanctions on the local economy, saying the restrictions suffocated Zimbabwe's ability to meet its international financial obligations, while denying the country critical balance of payments support. Zimbabwean importers are forced to pay cash upfront, loan inflows to Zimbabwean companies have dropped, and the country's agricultural output has fallen due to an inability to import farming equipment.

An affidavit by Rutendo Matinyarare, director of ZASM, argues that US sanctions are inconsistent with the terms of the African Free Trade Agreement, to which SA is a signatory, and the Bilateral Investment Promotion and Protection Agreement (Bippa) between SA and Zimbabwe.

Sanctions have created instability in the region, with sometimes violent consequences, argues Advocate Simba Chitando, who is representing ZASM in the case. "The recent emergence of populist gangs threatening to cleanse South Africa of Zimbabwean nationals in the country is an unfortunate by-product of unilateral sanctions on Zimbabwe. Many Zimbabwean nationals risk danger in South Africa, and live and work under precarious circumstances to avoid a Zimbabwean economy besieged by sanctions.

"Even after the reasons motivating economic sanctions have gone. President Mugabe has been replaced by President Mnangagwa, white farmers will be compensated for loss of property, and Zimbabwe has been lauded for economic reforms by international investors. But the coercive sanctions have remained."

US sanctions punish Zimbabweans for making political choices the US does not like, and targets Zimbabwean property for criminal offences unproven in any court, adds Chitando. South Africa's Constitution, among the most humane in the world, cannot be overruled by the realpolitik of US economic and military might.

Sanctions imposed for the purported benefit of Zimbaweans and with the aim of holding the government to account has yielded numerous perverse consequences, including a shrunken Zimbabwean economy that has driven millions of citizens out of the country in search of work, exposing them to xenophobic violence in SA.

Chitando concedes it will not be an easy case. Goldman Sachs, Citigroup, Bank of America, and First Rand – four of the financial institutions cited as respondents – have briefed the leading law firms in the country "to defend the indefensible".

However, a victory of the ZASM may have important consequences for other countries exposed to US sanctions, such as Russia and Iran.



Source - moneyweb