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Zimbabwe oil processing firm seeks removal of U.S. sanctions

Xinhua, July 26, 2016 Adjust font size:

A Zimbabwean cooking oil processing company said Tuesday it is seeking removal from the U.S. sanctions list after shedding off a minority stake previously owned by a state-owned entity that is on U.S. sanctions.

Olivine Industries, once Zimbabwe's major oil processor and producer of fast moving consumer goods, is struggling to keep afloat after being slapped with U.S. sanctions over a decade ago.

The company was put on the sanctions list due to a 1.4 percent stake that was owned by the Industrial Development Corporation of Zimbabwe (IDCZ) which is currently on U.S. sanctions.

On Tuesday, chairman of Olivine Industries Peter Madara told a parliamentary committee that the IDCZ early this month disposed of its stake in Olivine to a local shareholder, paving way for the oil processor to start negotiations with the U.S. Office of Foreign Assets Control (OFAC).

"We have changed our shareholding structure and we hope to engage OFAC to see if we can be taken off the sanctions list," said Madara.

"So we are now in the process of applying to OFAC to be removed from the sanctions list."

Madara said the sanctions made it difficult for the oil processor to trade freely as banks were not keen on doing business with it.

He added that the company's 1.9 million U.S. dollars was blocked by OFAC in 2012 and this had severely affected the company's viability.

It is currently operating at between 25 and 30 percent capacity utilization owing to shortages of raw materials, a liquidity crunch and stiff competition from imports, among other challenges.

The U.S. and the European Union imposed sanctions on Zimbabwe in the early 2000s following a fallout with Harare over alleged human rights abuses.

However, the EU in recent years gradually removed the sanctions with President Robert Mugabe and his wife Grace and a state arms firm being the only ones still under the bloc's sanctions.

The U.S. has largely kept the sanctions in place although in January this year it removed two Zimbabwean banks from the sanctions list. Endit