Harare — BUSINESSMAN Mr John Bredenkamp has won an interim order preventing South Africa's Standard Bank from closing his accounts following the United States' decision to place the Zimbabwe-based tycoon on sanctions for purportedly being President Mugabe's "confidante and financial backer".

The ruling is the first direct blow against the illegal sanctions that the US through its Treasury has imposed on Zimbabwean businesses and individuals.

The US sanctions regime also extends to the country as a whole by barring multilateral lending institutions in which the US has a shareholding from extending lines of credit to Zimbabwe.

The US and the EU imposed sanctions on Zimbabwe in 2002 after Government embarked on the land reform programme.

Last December, Standard Bank wrote to Mr Bredenkamp - who has several accounts with the bank - notifying him that they did not want to do business with him anymore.

The bank had said it would close his accounts with effect from last Tuesday.

This followed the November 25, 2008, action by the US Treasury Department's Office of Foreign Assets Control, which administers the widely condemned sanctions regime, listing Mr Bredenkamp and his companies as "specially designated nationals" restricted from trading with American concerns.

Mr Bredenkamp was accused by the US of "being involved in illicit business activities, including tobacco trading, arms trafficking, oil distribution and diamond extraction, and of being a confidant and financial backer of (President) Mugabe."

However, the High Court in Johannesburg, said Standard Bank's intended action was "oppressive."

Judge Mahomed Jajbhay issued an interim order saying Standard Bank could not close Mr Bredenkamp's accounts because this would harm the latter's businesses.

"A business entity must, to carry out its objects, have one or more bank accounts. This is not simply because transactions through a bank are convenient," he said.

The bank had argued that it was "worried about its reputation" and claimed that it would lose domestic and foreign business because some people would think that "accounts held at Standard Bank would or could be used to facilitate unlawful or unethical acts."

They further said "an association with a conductor or a financier of allegedly illegal or improper transactions might well undermine a bank's hard-won and fragile national and international reputation in the eyes of regulatory bodies, financial institutions, media organisations and members of the public worldwide." Bredenkamp challenged the bank's intended action saying he had lodged appeals against the US decision to impose sanctions on him.

He also argued that if Standard Bank closed his accounts, none of the other banks would want to have any dealings with him.

One observer questioned Standard Bank's arguments, saying it was ironic that the financial institution should claim an uneasy conscience over dealing with Zimbabwe-based businesses considering its own history.

"It is rather ironic that they should talk about getting a tarnished image from dealing with legitimate Zimbabwean businesses when the bank made its name on the back of apartheid.

"Furthermore, how can they speak of goodwill when they want to implement a discredited sanctions regime that has been decried by just about everyone including the government of South Africa," the observer said.

Standard Bank of British South was established in 1862 but dropped "British" from its name in 1883.

It was prominent in financing and developing the Kimberley diamond fields from 1867 and created its base from the slave-labour conditions that prevailed in the South African mining sector.

Mr Bredenkamp is not the only person so far to individually challenge the illegal sanctions.

Senator Aguy Georgias has also challenged the European Union's sanctions regime, saying the embargo was in violation of the bloc's own rules particularly in regards to the travel bans.

His argument was that the ban and financial restrictions on Zimbabwe were not adopted on public policy grounds but rather as a foreign policy stance and were therefore unlawful under EU legislation.

This challenge came after a ruling by two British judges dismissed an earlier challenge in a London court on the legality of the travel ban.

However, the judges could not fault the legal arguments against the sanctions and acknowledged that the sanctions were a foreign policy position.

A 2007 study on the implementation of the Cotonou Partnership Agreement, the document under which the EU sanctions were imposed, admitted that the embargo was a political tool designed to influence the outcome of elections in Zimbabwe as a direct response to the land reform programme.

The study said the United Kingdom pressured other EU members to slap sanctions in violation of procedures as outlined in the Cotonou Agreement.