2. In summary, the analysis concludes that sanctions will not be
effective so long as South Africa continues to act as a conduit for
Rhodesian trade. Indeed, we believe Pretoria is unlikely to abandon or
weaken its close economic support of Rhodesia. For example, exports of
Rhodesian chromite can be easily blended with South African ore and will
then be extremely difficult to detect and probably legally impossible to
substantiate. Detection of the origin of Rhodesian exports of
ferrochromium—a processed form of chromite—is presently impossible.
Because of their general disinclination, and the difficulties in
identifying goods of Rhodesian origin, other Western countries have
preferred not to enforce—or simply to ignore—the sanctions.
3. As regards other sanction initiatives against Rhodesia, an
Interdepartmental Group chaired by State is exploring such
possibilities. They will forward their report separately and shortly to
Mr. Brzezinski.3
Attachment
Paper Prepared in the Central Intelligence
Agency4
Washington, March 25, 1977
The Effectiveness of UN Sanctions Against
Rhodesia
Despite a decade of UN sanctions, Rhodesia’s economy still ranks
about fifth in sub-Saharan Africa, and its manufacturing sector is
probably second only to South Africa. The trade embargo had its
greatest effect in the first year (1966). Tobacco, until then the
country’s largest foreign exchange earner, and other agricultural
exports were particularly hard hit. Two years later, however, the
economy showed definite signs of recovery. In 1968 the GNP rose above the 1965 level and it
continued climbing rapidly until the world recession took its toll
in 1975. Internal problems—military claims on the work force and
investor and consumer uncertainty—have prevented recovery; GNP stagnated last year. Exports,
however, buoyed by foreign demand for minerals and metals, were the
one area beginning to show signs of life in the second half of
1976.
South Africa holds the key to a real enforcement of United Nations
sanctions against Rhodesia. Sanctions would work only if Pretoria
complied fully, or if the UN were to impose and enforce a trade
embargo against South Africa. Strong foreign demand for Rhodesia’s
minerals, together with Salisbury’s willingness to cut export prices
and pay premium prices for imports, has encouraged traders to
operate under the guise of dealing with South Africa—and Mozambique
until the latter closed its border to Rhodesian rail traffic in
March 1976.
Pretoria is unlikely to abandon or weaken its close economic support
of Rhodesia. It has supplied essential petroleum products and has
accommodated Rhodesian exports and imports in its transport network.
Pretoria almost certainly has provided documentation, indicating
South Africa as the origin of Rhodesian goods. “Business as usual”
has been Pretoria’s policy from the inception of sanctions, in part
reflecting the government’s concern that any successful sanctioning
of Rhodesia might whet appetites to try an embargo of South
Africa.
Industrialized countries also have helped Rhodesia weather the
sanctions. Besides the Byrd
Amendment permitting US chrome imports,5 Japan, West
Germany, Netherlands, France, Belgium, Swit
[Page 392]
zerland, Italy and others have not enforced—or
simply ignored—the sanctions. The UK has levied large fines on
violators it convicts but finds it difficult to prove that sanctions
have been bypassed.
With South Africa acting as the conduit for Rhodesian trade, it is
nearly useless to try to identify goods as Rhodesian origin. South
Africa produces in abundance many of the principal exports of
Rhodesia: chrome ore, ferrochrome, copper, asbestos, gold, meat and
sugar. It imports identical categories of goods: machinery,
transportation goods, petroleum, and cereals.
The Chrome Example
The recent repeal of the Byrd
Amendment6 prevents the direct import by the US of
Rhodesian chromite and ferrochromium and of products from any
country “containing chromium in any form which is of Southern
Rhodesian origin”. We believe that the latter will be extremely
difficult, if not impossible, to enforce so long as South Africa
acts as a middleman.
The quantities directly exported by Rhodesia to the US in 1976—31,000
tons of chromite and 43,000 tons of ferrochromium—could easily be
mixed into South African exports. According to expert opinion, it
would be extremely difficult to detect and probably legally
impossible to substantiate the inclusion of Rhodesian with South
African chromite. The mixing process itself would simply involve
loading into a ship’s hold from two jointly operated conveyor belts,
one containing Rhodesian ore and the other South African ore. In the
form of ferrochromium, it would be impossible to determine the
origin of the product. Therefore, short of tracing each carload from
its point of origin in Rhodesia to its entry into the hold of a
US-destined ship or to a ferrochrome plant in South Africa which is
supplying only the US market, it would appear highly unlikely that a
clear-cut determination of a falsely certified shipment could be
made.
In addition to South Africa, other countries that ostensibly adhere
to the UN sanctions have in the past imported Rhodesian chrome and
also could act as a conduit in the future for such shipments to the
US. Circumstantial evidence, for instance, links both Japan and West
Germany with such activity in earlier years. In 1970, both indicated
far larger imports of chromite from South Africa than were recorded
by South African trade statistics on exports to those countries; the
difference presumably represented chromite originating from
Rhodesia. [4 lines not declassified]
[Page 393]
US Trade Leverage
With the repeal of the Byrd
Amendment, the already small US economic leverage on Rhodesia has
disappeared. Efforts to influence Salisbury through US oil companies
operating in South Africa also would not have much impact. Rhodesia
imports only about 30,000 b/d and in the last analysis, South Africa
could react to US pressure on the oil companies by nationalizing
them.
[1 section (10 lines) not declassified]
Enforcement Problems
[less than 1 line not declassified] an
effective embargo against Rhodesia is impossible without the full
cooperation of South Africa. [less than 1 line not
declassified] almost all Rhodesian exports and imports pass
through South Africa. Given that most Rhodesian export commodities
are also produced in South Africa, it is impossible for the
importing country to determine the origin of goods imported from
South Africa. South African officials are apparently quite willing
to make false certificates of origin for Rhodesian goods, especially
when such goods have been partially processed in South Africa.
Similarly, countries exporting to South Africa have no assurance that
their goods will not be transshipped to Rhodesia. [less than 1 line not declassified] the South African
Official Secrets Law7 prevents inquiries about the ultimate destination
of South African imports. [less than 1 line not
declassified] the case of Mobil Oil Corporation. When Mobil
asked Pretoria where its oil was being sent—presumably in order to
comply with UN sanctions—the company was told to “watch out” as it
could be accused of “espionage”.
Even without the South African connection, [less
than 1 line not declassified] certain enforcement problems
would remain. [less than 1 line not
declassified] despite Swiss official adherence to the UN
sanctions, Swiss banks are extensively used for payments to
Salisbury and that bank secrecy prevents tracing of such payments.
Given the large profits to be made in Rhodesian trade, firms and
middlemen in many countries are eager to find ways to bypass the
sanctions. Although governments may have a fairly accurate idea of
the activities of their nationals, proof in the legal sense is
almost impossible to obtain. [less than 1 line not
declassified] there have been only two prosecutions outside
the UK (both in West Germany) for sanction violations.
The British themselves have successfully prosecuted a number of
sanctions cases, and they believe that the large fines levied have
served as deterrents to such activity by UK nationals. They feel
that the close
[Page 394]
attention
that HM Customs gives to Rhodesian trade has been a major factor in
UK successes. They admit, however, that they are forced to drop many
cases because of lack of evidence.
Rhodesian Resiliency
[less than 1 line not declassified] the
Rhodesian economy has been able to adapt to sanctions far better
than had been predicted. Real economic growth averaged 7% annually
through 1974, and the later falloff was more the result of world
recession and diversion of men and materials for the guerrilla war
than of sanctions. Import substitution industries, including such
capital and technology intensive industries as iron and steel, have
been developed. Agriculture has been diversified away from export
commodities such as tobacco in order to supply the domestic economy
with a variety of foodstuffs and raw materials.
Positive Effects
Despite the lack of economic impact, [less than 1
line not declassified] sanctions are valuable for their
psychological and political effects. [less than 1
line not declassified] the “drip by drip” campaign in the
UN has focused attention on the problem and made it politically
costly for some countries to evade sanctions. [less than 1 line not declassified] they recently gained
the cooperation of Botswana in curbing utilization of Francistown as
a declaration point for false import certificates.
[less than 1 line not declassified] there is
room for stepped up public and diplomatic support for sanctions by
the US and other developed countries. [2 lines not
declassified] some African countries would be hurt by
increased public attention to sanctions; Botswana, Zaire, Zambia,
etc., still buy Rhodesian foodstuffs and need such supplies more
than Salisbury needs the foreign exchange involved.
[less than 1 line not declassified] When
sanctions began 11 years ago the Prime Minister publically
proclaimed the Smith regime
would fall in a matter of weeks. We have held from the beginning
that sanctions would not work so long as South Africa refused to go
along.
