In 2021, Frontline Marketing, my company, was approached by an Italian client interested in buying gold in Zimbabwe.
Upon their inquiry, I contacted Henrietta Rushwaya to inquire about the gold buying process. She immediately informed me that she doesn't deal in gold in her personal capacity and advised me to ask my client to write a Letter of Intent to the Zimbabwe Miners Federation (ZMF), which has a gold buying license representing over 1.2 million artisanal and small-scale miners.
Subsequently, my client wrote the letter and ZMF responded. In their cover email attached to their response, they stated that ZMF is eager to expand the mining capacity of small-scale miners, in pursuit of Zimbabwe’s 2023 $13 billion mining output.
And in order to achieve this, they were looking for partners who would pay retainers, invest in machinery and be part of the value-chain that would produce the gold they were seeking, rather than clients who wanted to pick-and-pay for gold.
Furthermore, in the ZMF proposal, it was outlined that the deal would be negotiated among the client, RBZ (The Reserve Bank Of Zimbabwe), the Government of Zimbabwe, ZIMRA (Zimbabwe Revenue Services), ZMF, and Fidelity Printers. They also stated that all deliveries would have to be approved and signed-off by the above stakeholders and go through ZIMRA for tax collection.
Initially satisfied with the proposal, the client eventually withdrew after becoming aware of the sanctions imposed on Zimbabwe. Upon listening to the Al Jazeera documentary, Henrietta seems to be saying the same thing that was written in the ZMF proposal to my Italian client. However, her submission appears to have been manipulated to convey a different message.
Since 2021, the Zimbabwean government has been granting more black Zimbabweans gold buying licenses to enable them to purchase gold and sell it globally on behalf of Fidelity Printers. This is because Fidelity Printers has been removed from the London Bullion Market Association and cannot sell internationally due to sanctions on it and MMCZ (Minerals Marketing Corperation of Zimbabwe).
How Is Fidelity Under Sanctions.
Fidelity Printers is under sanctions due to the OFAC Zimbabwe Sanctions program of 2008, which stipulates that no person or entity can materially assist, sponsor, or provide financial, material, logistical, or technological support to the Government of Zimbabwe, any senior official of the government of Zimbabwe, its companies, those who do business with them or the 144 special designated Zimbabwean nationals on the list.
Under the subheading prohibited transactions, it states that unless authorized or exempted [by OFAC, U.S Secretary of State], U.S. persons or non-U.S. persons are prohibited from transferring, paying, exporting, withdrawing or otherwise dealing in the property or interests in property of an entity or individual listed on the SDN List and, by deduction, the blocked individuals mentioned in the paragraph above in the same document.
To enforce these clauses, the U.S. OFAC imposed sanctions on a Zimbabwean company called Sakunda in 2021, despite not being an American-owned company. Even though Sakunda is a Zimbabwean company, it was accused of materially assisting, sponsoring, or providing financial, material, logistical, or technological support to the Government of Zimbabwe, which is a violation of the OFAC Zimbabwe document clauses.
Additionally, in December 2022, they added Sakunda associated companies like Fossil Contracting and Fossil Agro to the list for being associated with Sakunda and also giving material assistance to the Zimbabwean government and/or its companies.
MMCZ was incorporated by statute of the government of Zimbabwe to buy and export all Zimbabwean minerals, including gold, to prevent transfer pricing and leakage. For this reason, the company is not only sanctioned as a company of the Zimbabwean government but is also specifically listed as a SDN (special designated national) alongside Zimbabwe Mining Development Cooperation to hinder Zimbabwe's ability to process and export its minerals.
The Reserve Bank of Zimbabwe's printing and gold smelting subsidiary (Fidelity Printers) was therefore sanctioned to prevent Zimbabwe from processing and exporting its gold, thus forcing the government to rely on agents and licensed gold buying middlemen, as stated in the UN Special Rapporteur's preliminary report in 2021.
However, the use of middlemen to bypass legal or illegal sanctions is not new, as the Rhodesians used Rio Tinto and Anglo America's Salga and Contra AG as middlemen in Switzerland to circumvent legal UN sanctions so as to keep the Rhodesian regime functioning.
In fact, the United Nations Human Rights Council's resolution UNHRC/34/13 enjoins nations that are under sanctions to do whatever they can to mitigate and circumvent illegal (unilateral) economic coercive measures (sanctions), which is what the government of Zimbabwe is doing if it has indeed permitted licensed gold buyers and sellers who have money laundering clearances where they sell the gold, to export on the nation's behalf.
This text was written by Rutendo Matinyarare, Chairman of ZASM and Founder of Frontline Marketing Consultancy.