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RUCNDT/USMISSION USUN NEW YORK 1455

C O N F I D E N T I A L SECTION 01 OF 02 HARARE 000724 
 
SIPDIS 
 
SIPDIS 
 
AF/S FOR B. NEULING 
SENIOR AFRICA DIRECTOR C. COURVILLE 
STATE PASS TO OFAC 
TREASURY FOR J. RALYEA AND B. CUSHMAN 
COMMERCE FOR BECKY ERKUL 
 
E.O. 12958: DECL: 06/14/2015 
TAGS: PGOV KFPC PREL ZI
SUBJECT: US SUBSIDIARY CONFESSES SANCTIONS SINS 
 
Classified By: Charge d'Affaires, a.i., Eric T. Schultz under Section 1 
.4 b/d 
 
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Summary 
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¶1.  (C) The Managing Director of the Zimbabwe branch of 
Greif, an Ohio-based packaging company, told poloff on June 
14 that his branch had been knowingly violating US financial 
sanctions for several years by providing services to Robert 
Mugabe and other specially designated nationals (SDNs). 
Tichafa Ndoro said his head office in Ohio was aware of the 
transactions.  Confronted with the seriousness of these 
apparent violations, Ndoro returned to the Embassy on June 15 
with the company's domestic financial officer and Zimbabwe 
lawyer, who contended that Greif should not be subject to the 
executive order.  End Summary. 
 
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Executive Comes Clean on Sanctions 
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¶2.  (C) A member of the American Business Association of 
Zimbabwe (ABAZ), Ndoro telephoned poloff on June 13 initially 
requesting that emboffs brief an American official from their 
South Africa office, Rob Zimmermann, who plans to visit 
Zimbabwe next week on an orientation tour.  Recalling a 
letter sent by the Embassy to all ABAZ member reminding them 
of US financial sanctions, Ndoro also asked if he could meet 
with poloff to learn more about the sanctions and possible 
implication on Zimmerman's trip.  Poloff shared with Ndoro 
that there were no sanctions against travel to Zimbabwe. 
During this initial phone conversation, Ndoro told poloff 
that he had recently received a check "from the office of the 
vice president."  Poloff agreed to meet with him the next day. 
 
¶3.  (C) On June 14, Ndoro told poloff that his company has 
been providing packaging material to one of Mugabe's poultry 
and pig farms, named Kutama Farms, for the past 15 years. 
Ndoro remarked that he often stared in disbelief at the 
checks, which were written from Mugabe's personal bank 
accounts.  He also stated that Greif had recently received a 
check from Vice President Joseph Msika for similar packaging 
material.  Although the company no longer accepted checks 
from ordinary clients, Ndoro said that he made exceptions for 
Mugabe and Msika. 
 
¶4.  (C) Poloff advised Ndoro of the financial sanctions 
against Mugabe, Msika, and other high-ranking GOZ officials. 
Ndoro responded that he was already aware of the executive 
order.  Seeking to justify his actions, he asked how his 
company was supposed to turn down the President of Zimbabwe. 
Moreover, other US companies involved in the agricultural 
sector, such as Olivine and Pioneer Seed, were also violating 
the sanctions.  The executive even mentioned that some in his 
office had suggested that the sanctioned individuals develop 
ways to disguise their involvement. 
 
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Notified Head Office of Violations 
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¶5.  (C) Ndoro told poloff that he had notified his head 
office in Ohio that he was selling to SDNs.  He did not 
indicate what response if any response came from the U.S. 
office.  Ndoro stated that Greif headquarters had recently 
 
HARARE 00000724  002 OF 002 
 
 
asked all managing directors of its foreign offices to sign a 
code of conduct, which among other things required the 
managing directors to abide by U.S. sanctions.  Ndoro was the 
only executive not to sign the document, noting that he told 
his superiors that he would sooner resign. 
 
--------------------------------------------- ---- 
Arguing Against Sanctions' Applicability to Greif 
--------------------------------------------- ---- 
 
¶6.  (C) A tighter-lipped Ndoro returned to the Embassy on 
June 15 with the company's Zimbabwe lawyer, Susan Brighton, 
and finance manager, Herbert Pasipamire, to urge the 
sanctions' inapplicability to the Zimbabwe branch's 
activities.  The group argued that the branch conducted its 
operations entirely in Zimbabwe and was not considered a U.S. 
company under Zimbabwean law.  Moreover, they said most of 
Greif's stockholders were based in the Netherlands. (N.B. 
Which also maintains financial sanctions against Mugabe and 
his regime.)  The trio said they would furnish more detailed 
information on Greif's corporate structure relevant to the 
company's domicile as it may pertain to sanctions. 
 
¶7.  (C) The group urged further that sanctions not be applied 
in Greif's case on policy grounds.  They maintained that 
barring the company's business with sanctioned individuals 
would lead either to reduced sales and layoffs and/or the 
eventual take-over of the branch by ruling elite interests. 
They feared a rash of law enforcement actions by GOZ 
officials should they cut off sanctioned individuals, 
followed by the possible incarceration of branch principals. 
The damage to the company and its workforce would punish 
"innocents" without appreciable impact on those targeted. 
 
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Comment 
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¶8.  (C) We plan to develop more information on Greif and its 
possible sanctions violations, and will report accordingly. 
Given the local office's very open posture and willingness to 
share information, an approach to the company's potentially 
more cautious headquarters in Ohio at this time could prove 
counter-productive.  In the same vein, we can't rule out that 
knowledge of our interest in this case will get into the 
public domain.  However, we believe this could serve to 
reinforce publicly our commitment to pressing and isolating 
those targeted by the President's executive order. 
SCHULTZ