Gerald N. Mlotshwa
21 Oct, 2022
Targeted Sanctions: Substance Over Form – A Perspective
The Anti-Sanctions Day was adopted by the 39th SADC Summit that designated the 25th of October of every year as the day of solidarity with Zimbabwe against the sanctions.
It is likely that the United States will issue a statement explaining, as it previously did in a tweet dated 25thOctober, 2021 that:-
“U.S. Sanctions only target those who engage in corruption, violate human rights, and undermine democratic processes in Zimbabwe. The Government of Zimbabwe as a whole is not subject to U.S. sanctions. Only 83 individuals and 37 companies, in a country of over 15 million, are targeted by sanctions”.
Zimbabwe will state that these ‘restrictive’ measures are, in effect, not ‘targeted’ and are illegal under international law.
This article will focus on US sanctions and the extent to which they may be considered to be illegal under international law.
THE UNITED STATES SANCTION REGIME
The Zimbabwe Democracy and Economic Recovery Act, 2001 (‘ZIDERA’), was enacted by the US Congress.
Buttressing its provisions, and forming the premises for the annually renewed Executive Orders, commencing with Executive Order 13288 signed on 7the March, 2003, are the International Emergencies Economic Powers Act and the National Emergencies Act.
Accompanying these Acts are numerous Federal Regulations and Notices specific to Zimbabwe, and issued for the guidance of US individuals, companies and especially financial institutions.
The cost of putting in measures to eliminate or mitigate the risk of possible violation of all of these provisions is simply far too onerous and not worth the expense relative to the value of business between Zimbabwe and the United States for US banks.
Their solution, in many instances, has been to simply terminate any banking relationship with Zimbabwe.
THE PRECEDENT OF IRAN
On 19th August, 1953, the Prime Minister of Iran, Mohammad Mossaddegh was deposed in a ‘popular’ uprising orchestrated by the CIA of the United States.
The roots to this ‘regime’ change, was that Iran had sought to audit the documents of the Anglo- Iranian Oil Company, a British company, in order to verify that it was paying royalties.
There were also intentions to limit the amount of control that the company had over Iranian oil reserves. The oil company refused to cooperate. Iran’s oil industry was then nationalized, as were the company’s assets, and the representatives of Anglo-Iranian were expelled from the country. Britain mobilized the international company to impose an embargo and boycott Iranian oil to pressure Iran economically.
The United States was soon persuaded to intervene, via the CIA, on allegations that Iran was falling to communism. The Anglo-Iranian Oil Company eventually became a part of what is now known at BP Plc.
ENTER CLARE SHORT
In 1997 Zimbabwe asked the newly elected Labour Government in the UK, to honour an undertaking given during the Lancaster House talks, that Britain fund land reform in Zimbabwe.
Clare Short, the Secretary of State for International Development, responded stating, in part:-
“…We do not accept that Britain has a specific responsibility to meet the costs of land purchase in Zimbabwe”.
The letter was dated 5th November, 1997.
On 11th November, 1997, the Zimbabwean Government listed for compulsory acquisition 1471 farms.
Three days later, on ‘Black Friday’, 14th November, 1997, Zimbabwe’s stock market crashed, and the local dollar lost more than 70% of its value against the United States dollar.
Zimbabwe’s bilateral dispute with the UK over land reform was well and truly underway.
By 2000 the dispute had been characterized as a multilateral dispute with the United States at the forefront of condemning what it termed the breakdown of the rule of law in Zimbabwe, lack of respect for property and human rights. A year later, ZIDERA was enacted as part of the US law.
UNITED NATIONS CHARTER
Article 2(4) of the Charter provides that:-
“All Members shall refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any State, or in any other manner inconsistent with the Purposes of the United Nations”.
The Article entrenches the principle of ‘non-interference’ with the internal affairs of a member country.
Article 41 of the Charter places the authority for such interference within the auspices of the UN Security Council.
“The Security Council may decide what measures not involving the use of armed force are to be employed to give effect to its decisions, and it may call upon the Members of the United Nations to apply such measures”.
This is the basis of UN sanctions. All member states are obliged to comply with these measures.
Unilateral sanctions imposed by a member country against another country, are potentially illegal under international law as they violate the principle of non-interference enshrined in Article 2(4).
Substance over form
Or ‘…plus valet quod agitur quam quod simulate concipitur’ in Latin, which, loosely translated means ‘in contract the truth of the matter, rather than the writing, must be looked at.’
It is this principle, that is not only confined to the settlement or interpretation of fiscal or commercial disputes and transactions, that must be applied in determining the extent to which the US sanctions regime offends Article 2(4) of the United Nations Charter.
In many a documented case, the Courts have been consistent in stating that:-
“…a court of law will not be deceived by the form of a transaction; it will rend aside the veil in which the transaction is wrapped and examine its true nature and substance”.
Thus, describing a measure as ‘targeted’ or ZIDERA as an economic ‘incentive’ for Zimbabwe, is not enough.
To be scrutinized is the effect of those actions, because it is only then that the real intention of the measure can be ascertained for what it really is as opposed to what in form it purports to be.
THE CASE OF NICARAGUA
The findings of the International Court of Justice in the matter of The Republic of Nicaragua v The United States of America, 1986, are illustrative in this respect.
The ICJ had ruled that:-
“…the U.S. had violated international law … The Court found in its verdict that the United States was "in breach of its obligations under customary international law not to use force against another State", "not to intervene in its affairs", "not to violate its sovereignty", "not to interrupt peaceful maritime commerce…”
According to Human Rights Watch World report in 1993:-
“The United States refused to participate in the proceedings... The U.S. also blocked enforcement of the judgment by the United Nations Security Council…”
In her article titled “A Refresher on the principle of Non-Intervention”, Professor Carolyn A. Dubay, noted:-
“With the principle of non-intervention firmly embedded in international law, the continuing dilemma for the international community is how to determine when interference in another nations affairs rises to the level of ‘coercive’ in violation of international law. The direct threat or use of military force against a nation is obviously coercive, but in todays international environment with myriad treaty obligations and a globally integrated market, military means are hardly the only mechanism to “coerce” a nation into submission or compliance with another nations wishes. The Nicaragua case implicitly recognized that the non-intervention principle could extend to indirect interference through other means, such as economic and political pressure. At the same time it is difficult to draw a line between permissible international pressure and impermissible coercion”.
ZIDERA and other US Sanctions
The 2001 Act, amended in 2018 on the eve of Zimbabwe’s harmonized elections of that year, may very well be construed as containing provisions considered as impermissible coercion, and thus illegal under international law.
Section 5 of The 2001 Act, inter alia, authorizes the President of the USA to provide assistance in supporting “…an independent and free press and electronic media in Zimbabwe” and finance to provide for “democracy and governance programs in Zimbabwe”.
The ZIDERA Amendment Act of 2018, explicitly states that “…It is the sense of Congress that the United States should seek to forge a stronger bilateral relationship with Zimbabwe including in the areas of trade and investment, if the following conditions are satisfied…”
These conditions, properly construed, appear to legislate for the means by which the US will determine, subjectively, whether or not changes, largely of a political nature have taken place in Zimbabwe to its satisfaction.
The Amendment Act ignores the 2008 High Court of Zimbabwe ruling of the Patel J (as he was then) in Gramara Enterprises (Private) Limited & Anor v Minister of State for National Security that dismissed an application for the registration and enforcement of the decision of the SADC Tribunal concerning the compulsory acquisition of agricultural land in Zimbabwe.
Section 9 of the Amendment Act expects that Zimbabwe and SADC should enforce the decisions of the now disbanded tribunal notwithstanding that any such implementation would be, as was found by the High Court, inconsistent with the laws of Zimbabwe in particular the country’s Constitution.
Ultimately, the debate over the legality or otherwise of sanctions, and whether or not they are targeted, is resolved by looking at the effects of those measures as opposed to what the implementing party calls them.
In this respect, it is the expectation of many that the Report of the Special Rapporteur, Alena Douhan, on the negative impact of unilateral coercive measures on the enjoyment of human rights will provide the basis upon which serious consideration may be given to the repeal of sanctions against Zimbabwe and her people.