* Belgium says February "agreement" must be respected
* Lifting sanctions on diamond firm would boost Mugabe
* Global Witness cites alleged misuse of diamond revenues
By Adrian Croft and Justyna Pawlak
BRUSSELS, Sept 5 Belgium, centre of the global
diamond trade, is demanding that the European Union lift
sanctions on a Zimbabwean mining firm despite deep concerns
within the bloc over alleged fraud in a July election that kept
President Robert Mugabe in power.
Belgium's call for the removal of sanctions on the state-run
Zimbabwe Mining Development Corporation (ZMDC) has put it at
odds with other EU countries such as Britain which is reluctant
to rush into a move that could be seen as rewarding Mugabe.
EU states are squabbling over how to interpret an agreement
by EU foreign ministers in February to lift sanctions on ZMDC
within a month of the poll unless EU governments unanimously
agreed the vote was not "peaceful, transparent and credible."
This was part of an EU strategy of easing sanctions to try
to encourage 89-year-old Mugabe, Africa's oldest leader who has
ruled the former British colony for 33 years, to hold a fair
Mugabe overwhelmingly won the July 31 vote but it was
denounced as a "huge fraud" by his main rival Morgan Tsvangirai.
The EU has expressed "serious concerns" over the alleged
However, Belgium - home to the world's leading diamond
trading hub at Antwerp - argues that the EU has not refused to
recognise the election and so the February agreement must be
respected and sanctions on ZMDC lifted.
"For us, there is an agreement," Belgian Foreign Ministry
spokesman Hendrik van de Velde said.
He said the agreement was confirmed by diplomats from EU
member states last Friday and it was now simply a question of
drawing up a legal instrument lifting the sanctions on ZMDC,
something he expected to happen soon.
Belgium's interpretation of the debate is not shared by EU
officials who say talks are still going on about what to do.
Former colonial power Britain, which has been more critical
of the Zimbabwean elections than the EU as a whole, is reluctant
to see a rush to lift sanctions on ZMDC.
"No decision has yet been taken regarding the de-listing of
any individual or entity under the measures related to Zimbabwe,
including ZMDC. Discussions continue on the listing of ZMDC," a
Foreign Office spokeswoman in London said.
However unwelcome the move would be to Britain, some
European diplomats say it is inevitable the bloc will have to
lift sanctions on ZMDC in line with the February agreement.
"At the end of the day, we have to delist ZMDC," a diplomat
from one EU country said, asking not to be named.
ZMDC operates five joint-venture mines in the rich Marange
diamond fields, producing eight million carats last year and
generating $685 million in exports, the state-owned Herald
newspaper reported earlier this year.
Belgium says lifting EU sanctions on ZMDC would increase
Zimbabwe's tax revenues by $400 million a year as well as
bringing more trade to Antwerp.
Mugabe, buoyed by broad approval from African election
observers for the vote, has rejected the Western scepticism.
Anti-corruption watchdog Global Witness, citing links
between mining companies, insiders in Mugabe's ZANU-PF party and
Zimbabwe's pro-Mugabe military, has alleged that state diamond
revenues may have been directly spent on securing the Mugabe
re-election through intimidation of voters and vote-rigging.
"We would be very concerned if sanctions were lifted on ZMDC
now," Global Witness' senior campaigner on conflict resources,
Emily Armistead, told Reuters. "These sorts of allegations need
to be looked at much more carefully before the EU makes a
(Additional reporting by Cris Chinaka in Harare and Pascal
Fletcher in Johannesburg; Editing by Pascal Fletcher and Ralph