Remove Sanctions against Zimbabwe

NATURE OF SANCTIONS

14 Sanctions have traditionally been applied against certain countries to achieve desired political
and economic outcomes. These encompass the imposition of embargoes, trade and financial
restrictions, and diplomatic isolation.

15 In recent years, the coverage of sanctions has widened to include other elements that are not
directly linked to trade and commerce such as culture and sports.

Economic Sanctions

16 Economic sanctions and their proxies are by far the most important of all sanctions imposed on
a nation. In the main, they consist of the withdrawal, or threat of withdrawal of trade and financial
relations, including technical cooperation.

17 In an effort to refine the effectiveness of sanctions through disguised means, there has been a
shift towards the so-called targeted sanctions, which impose travel bans and freezing of foreign
bank accounts of targeted individuals or entities.

Trade Sanctions

18 Trade sanctions limit the country’s exports or restrict its imports. Trade barriers such as embargoes
and quantitative restrictions are thus imposed on the country.

19 Countries such as South Africa, Iraq, and Rhodesia, had trade sanctions imposed against them,
as the international community wanted to influence political changes.

20 In Zimbabwe, today, trade sanctions have taken the form of denied access to foreign lines of
credit, which ordinarily finance external trade. The market for the country’s exports is also
shrinking, as export competitiveness crumbles under adverse perceptions.

Financial Sanctions

21 Financial sanctions impede financial flows such as aid, short and long term loans, thus reducing
foreign exchange flows to Zimbabwe. Financial sanctions also interrupt commercial and trade
finance, through reduction of both Government and private sector access to foreign loans.

22 In addition, sanctions attract high risk premium on offshore lines of credit, and eventually scare
away alternative creditors, as they anticipate a credit squeeze in the future.

23 Thus, without the imposition of explicit trade sanctions, financial sanctions, especially involving
trade finance, interrupt trade, and ultimately constrain the economy’s foreign currency generating
capacity, as well as economic activity in general.