Standard Chartered bank is under fire for allegedly breaching EU sanctions on Zimbabwe. The Foreign Office admitted it is investigating one case of a possible breach of the sanctions.
Internal Foreign Office emails seen by The Independent on Sunday reveal that officials were concerned about the bank's activities. "I'd say Standard Chartered is my prime concern," says one email. "I've not asked them whether they've made any of these loan payments, but there's a good chance that they may have been forced to do so by the Reserve Bank of Zimbabwe."
Officials say that if a sanctions-busting case is proven "we will take appropriate action. We are determined to see that EU sanctions are properly enforced."
The Liberal Democrat chief whip, Norman Lamb, has tabled parliamentary questions asking if allegations of sanctions busting by Standard Chartered were being investigated. Mr Lamb has asked the Foreign Office how many investigations are taking place and for documents relating to the bank's involvement. He has also asked if the EU has complained about British banks in Zimbabwe.
Standard Chartered is one of three British-based groups to have provided an estimated $1bn (£500m) in direct and indirect funding to Robert Mugabe's administration. The influential newsletter Africa Confidential says that Standard, together with Barclays and the insurance firm Old Mutual, continue to provide an economic lifeline to the regime.
Barclays was accused last November of providing loans to senior members of Mr Mugabe's government running farms grabbed by mobs organised by his Zanu-PF party. Many of the farms, previously white-owned, were distributed to leading figures in the regime rather than to landless black Zimbabweans.
According to the Foreign Office emails, Barclays insists it has not breached sanctions. It told officials these didn't apply because the loans were made by Barclays Bank of Zimbabwe which, while majority-owned by the London-based group, was incorporated in Zimbabwe.
The 24 branches of Standard Chartered Bank in Zimbabwe are not believed to be incorporated locally but are subsidiaries of the London-based bank, which insists it complies with all sanction regulations.