Generally, US persons are prohibited from engaging in any transactions with SDN persons or entities on the Zimbabwe program, including entities 60% or more owned by an SDN. As always, certain transactions are exempt, including providing legal services for the designated persons. Civil penalties of up to $289,000, or twice the amount of underlying transaction, may be imposed against persons who violate Zimbabwe sanctions.
If you need assistance complying with OFAC sanctions or advice about permitted transactions, speak with an experienced OFAC attorney.
Background of Zimbabwe Sanctions
Executive Order 13288 provided executive authority to impose sanctions on certain persons and entities in Zimbabwe, due to the government undermining certain political processes in the country. Executive Order 13288 declared a national emergency with regards to the political situation in Zimbabwe, and Executive Order 13391 permitted the US government to designate certain persons and entities that fit the criteria of disturbing the democratic processes in Zimbabwe. Certain senior government officials and persons responsible for human rights abuses and corruption have been designated under the program tag, ZIMBABWE, which can be found on the US Office of Foreign Assets Controls search list.
Purpose of Zimbabwe Sanctions
The purpose of the Zimbabwe Sanctions is to change the behavior of the government and administration in Zimbabwe. The United States seeks to encourage Zimbabwe to conform to democratic ideals. It is up to the government of Zimbabwe to make these changes and show the United States that they are doing so.
The latest update is that US President Donald Trump extended these sanctions in claiming that Zimbabwe’s policies are still an unusual and historic threat to American foreign policy. Although African leaders have requested that the sanctions be removed, the sanctions were extended for another year.
Zimbabwe has an extensive currency crisis and rampant financial issues, partly due to the financial restrictions, but also corruption within their government. US persons are advised to conduct the necessary due diligence when engaging in transactions in Zimbabwe, particularly transactions that may involve the government.
Impact of OFAC Sanctions
These sanctions may hurt certain government entities, and eventually, they may hurt people in Zimbabwe. The restriction can impact individuals who have a certain level of connectedness or dependence on the government of Zimbabwe.
For individuals with business interests in Zimbabwe, it is critical to screen any transactions in the country or with the government for sanctions compliance. Since the penalties for sanctions violations can be severe, individuals should exercise due diligence and ensure their transactions are permissible.
If you have business interests within Zimbabwe or with its government, reach out to an OFAC attorney for legal advice about permissible business activities and help with sanctions compliance.