World: The Sanctions Busters

Experts may differ on the cure for Britain’s ailing economy, but everyone agrees that any loss of export markets can only make things worse. Thus it was no small gamble nine months ago when Britain persuaded the United Nations to call for a ban on trade with Ian Smith’s rebel, racist regime in

Rhodesia. Britain’s exports to its former colony had been worth $90 million a year. And it is only those exports that the ban is hurting. For the U.N. sanctions against Rhodesia have been largely ineffective.

In a series of meticulously researched articles aptly titled “The Sanctions Busters,” the London Sunday Times graphically explains the failure. For many companies and many countries, beating the embargo has become a big and profitable game. As a result, Rhodesia is nowhere near the economic collapse that the U.N.’s measures were intended to bring about.

Rhodesia, says the Sunday Times, produces six key commodities for sale abroad: tobacco, sugar, asbestos, copper, chrome and iron. According to the newspaper’s careful study of world markets, Rhodesia today “is selling all the asbestos and copper she sold before, around a third of the chrome, almost half the iron ore and a third of the tobacco.” Only on sugar have the sanctions worked. As a result, Rhodesia will earn some $150 million this year, selling goods in defiance of U.N. sanctions—goods that enter world markets bearing false bills of origin from other countries.

Stolen Sample. Much of the exporting begins by rail. Shipments go to friendly Portuguese Mozambique and its port of Beira. Since the rail lines from Malawi also run to Beira, outgoing Rhodesian goods are simply provided with Malawian or Mozambican certificates of origin before being loaded aboard ship. To show how brazen the practice getting around the U.N. rules has become, the Sunday Times reprints a Mozambique certification for 4,500 Ibs. of corned beef—a profitable product that the Portuguese colony does not manufacture.

Asbestos is handled somewhat differently. Before sanctions were ordered by the U.N., the British company of Turner & Newall, which produces most of Rhodesia’s asbestos, had a vision of things to come. So it prepared for future problems by setting up a South African subsidiary called Southern Asbestos. Although the mineral still moves straight from Rhodesian mines to a Mozambique port without ever going through South Africa, the company simply supplies each shipment with a South African certificate of origin. Outgoing chrome is usually labeled South African as well and is bought in large quantities by the Japanese. Not long ago, says the Sunday Times, 20,000 tons of chrome ore arrived in Tokyo from “South Africa,” and for the 27th time in six months the British embassy lodged a protest with the Japanese government. This time they backed their arguments with an ore sample stolen from dockside and chemically analyzed to prove its Rhodesian origin. The Japanese coolly replied that since the chrome bore South African certificates, it must be from South Africa.