2. Letter to the Clerk of the Committee from the Parliamentary Relations Team, Foreign and Commonwealth Office
ZIMBABWE
Your letter of 26 November asked the FCO to comment on the allegations made by the Sunday Times on 11 November about Barclays Bank in Zimbabwe and give the Government's view as to whether EU or UK sanctions against Zimbabwe have been breached.
We take seriously any allegation of a possible breach and will always investigate it to establish the facts. The activities of banks incorporated in Britain and operating in Zimbabwe are subject to Council Regulation (EC) 314/2004 concerning certain restrictive measures in respect of Zimbabwe (OJ 2004 L55/1). If there is a breach of any kind, we will act. We are determined to see that EU sanctions against Zimbabwe are properly enforced.
It is this Government's policy not to comment on individual cases, but I can confirm that to date there have been no cases where British banks have been found to be in breach of the prohibitions of the EU regulations. There are two principles that underpin any such investigation. First, EU regulations apply to EU companies and these companies must not themselves breach the prohibitions. Second, the same regulations apply to any EU subsidiary of the parent company.
In determining whether an overseas company is an EU subsidiary, the key consideration is where that subsidiary is incorporated. If it is in the UK or EU, it is considered an EU subsidiary. But if it is outside the UK, it is considered a non-EU subsidiary and not therefore subject to the EU regulations. Additionally, the fact that an EU company may hold a majority shareholding in a non-EU subsidiary does not make the subsidiary an EU company.
We are happy to discuss with the Committee any further questions on the application of EU sanctions against Zimbabwe.
Richard Cooke
Head
Parliamentary Relations Team
18 December 2007
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