The targeted restrictive measures against the Zimbabwe Mining and Development Corporation (ZMDC) were officially removed by the European Union on Tuesday, amid mixed reaction to the move.
The decision to delist the ZANU PF run ZMDC was communicated by the EU foreign affairs spokesman Michael Mann last week, and then confirmed in an official journal from the European bloc on Tuesday.
The reasoning given for the move, which has been strongly backed by the world's diamond trade leader Belgium, is that the ZMDC "did not participate in the financing of electoral campaigns."
London based pressure group Global Witness has said the decision is "rushed", because of concerns about the credibility of Zimbabwe's July elections.
Research by the international group has previously indicated that ZANU PF and the military siphoned revenues from diamond ventures the ZMDC is involved in, in the controversial Chiadzwa diamond fields. Last year, the campaign group published detailed evidence indicating that revenues from ZMDC firms were providing 'off-budget financing' to the security forces.
"There are credible indications that at least one ZMDC joint venture company helped fund ZANU PF activities which have undermined the democratic process in Zimbabwe. The EU should have given more time to investigating these claims before lifting sanctions," Global Witness said.
The EU has not yet made any statement about the future of the rest of its targeted measures, still in place against one other entity and a handful of ZANU PF individuals, including Robert Mugabe.
The US, on the other hand, has said its policy will not change until democratic reforms are implemented by the ZANU PF government.
MDC Senator David Coltart has said the targeted measures should be lifted in order to remove the 'scapegoat' for ZANU PF's failures, with Mugabe's party relentlessly blaming the Western-imposed measures for Zimbabwe's myriad of problems.
But former Chegutu farmer turned activist Ben Freeth said the targeted measures should not be relaxed until there is a return to the rule of law.
"The only thing I believe dictatorships around the world understand is pressure and I believe it is time to ratchet up pressure now, not relax it.
I am glad some countries have stuck by their principles, but they need to re-extend those targeted sanctions against those who are involved and have been involved in the past in human rights abuses," Freeth told SW Radio Africa.
He added: "We see what happens when the rule of law is disestablished in Zimbabwe and in countries around us. We need the rule of law to return and certainly while there are people who flout the rule of law and commit human rights abuses, everyone will continue to suffer."
"So we can't have a situation where the pressure is brought off."