April 18, 1995

It was in 1916 Eth. C. that a book written by an Austrian educated young Ethiopian was published posthumously. In this book, Negadras Ghebre Hiywet Baikedagn, describes, amongst other things, the history and function of banks. Exactly seventy-one years later the Commercial Bank of Ethiopia has not learnt some of the fundamental prerequisites of banking, the most important being winning the trust and confidence of its clients.
The Ethiopian Human Rights Council operated a current account which it opened at the Finfine Branch of the Commercial bank of Ethiopia at the end of 1991. As everyone knows EHRCO advertised its accounts in all its reports in order to facilitate the transfer of donations from anywhere.
On March 27, 1995 after the publication of EHRCO's book, Democracy, Rule of Law and Human Rights in Ethiopia: Rhetoric and Practice, and coinciding with H. E. the Ambassador of Switzerland's prejudiced, impetuous and irrational Open Letter on EHRCO's book, the Commercial bank of Ethiopia, presumably acting on instructions, blocked EHRCO's current account.
The Chairman of the Ethiopian Human Rights Council telephoned the Governor of the National Bank and the General Manager of the Commercial Bank and reported the blocking of EHRCO's account. Both officials were dismayed at what they referred to as illegal action. The General Manager of the Commercial Bank was kind enough to promise to look into the matter immediately and telephone back. He did. He said that the pretext for blocking the account was that EHRCO did not produce a certificate of registration and that, therefore, the best way out of the impasse would be to open a joint account and transfer the money to that account.
The Executive Committee of EHRCO discussed the suggestion and, for the sake of continuing its smooth relationship with the Commercial Bank, accepted it. Accordingly, all formalities for opening a joint account were completed and the joint account was opened. Two days later, EHRCO was told that the money would not be transferred to the new joint account, as the General Manager himself had suggested.
The Chairman and the Secretary General of EHRCO met with the General Manager and reported the problem. He was now a completely different person and had totally reversed his previous position. Nevertheless, he told the Chairman and the Secretary General of EHRCO that he would discuss the matter with his superiors and let EHRCO know by the morning of April 7, on which day EHRCO received nothing from the General Manager. In the afternoon of April 7, 1995 EHRCO served a legal notice to the Commercial Bank of Ethiopia.
This is the unfortunate situation in which EHRCO finds itself by the illegal action of the Commercial Bank of Ethiopia acting as a political instrument of the regime, breaching its contractual obligation and breaking the trust of its client. This action simply serves to provide a fresh evidence for the fact that the regime's rhetoric has very little to do with its practice.
The practice of blocking private and organisational accounts was common during the time of the Derg. The Commercial Bank, like any other institution or agency in the country, was under the rule of WPE cadres. Now we are seeing more and more evidence that these same institutions and agencies are under the rule of EPRDF cadres. This is a practice that damages the trust and confidence that clients ought to have on the Commercial Bank of Ethiopia. If differences of opinion between the regimes in power and individuals and organisations are used as pretext to block their accounts, there is no basis for trust. It is also a practice that destroys professionalism in the Commercial Bank.
The pretext that the Commercial Bank gave to block the account of EHRCO is that it does not have a certificate of registration. The officials of the Commercial Bank said that to have business activities with an association that is not registered by the government is tantamount to recognising the association. Because of this, they said, the Bank will not allow EHRCO to operate its current account, or to return the money and close it. The argument of the Commercial Bank is ridiculous. First, the Commercial Bank is an ordinary business organisation which functions in accordance with Articles 396 and the subsequent Articles of the Commercial Code. It is not a regulatory authority that confers recognition. Second, no one, not even a regulatory authority has a legal right to confer recognition. Recognition emanates from the law. EHRCO was formed in October 1991 on the basis of Article One of the Transitional Charter and in accordance with the provisions of Article 404 and the subsequent Articles of the Civil Code of Ethiopia.
EHRCO is a non profit-making and non political civil association committed to the cause of human rights. It is governed by its statutes drawn up and approved by its members in accordance with Articles 409-411 of the Civil Code. The statutes have been deposited with the Ministry of Internal Affairs within one month of EHRCO's formation as required by Article 411 of the Civil Code. EHRCO is managed by a seven-man Executive Committee, and hence has fulfilled all the requirements of Articles 426-429 of the Civil code. Once an association has fulfilled these legal requirements, it has the right to perform all civil acts which are consistent with its nature through its organs of management. This is what the Civil Code of Ethiopia provides regarding civil associations.
There is nothing in the Civil Code, which is the basic law, which provides that an association may not perform civil acts unless it is registered with the Office of Associations. It is up to the office of associations, which is the Ministry of Internal Affairs, to keep a register of the associations established and declared to it. And this is only for control purposes and not for the purpose of conferring recognition. As a matter of fact, EHRCO had applied for registration in November 1991, even though it does not have a legal obligation to apply for registration.
More than a year ago the Ministry of Internal Affairs demanded the pictures and particulars of the members of the Executive Committee. This was submitted in time. The question of registration, therefore, is a matter between EHRCO, the Ministry of Internal Affairs and the Courts. It is not the concern of the Commercial Bank. If, for whatever reason, the Commercial Bank of Ethiopia wishes to sever its business activities with EHRCO, the most it can do is to cancel the contract of deposit and return the money that belongs to EHRCO. That is what Article 1815 of the Civil Code provides.
The actions of the Commercial Bank of Ethiopia are tantamount to robbery. All of us had hoped that such practice which was quite common during the rule of the Derg had come to an end. This is one more evidence for the fact that many of the policies of the Derg are still operational, although the Derg is condemned as fascist nearly every day. It is also a fact that throws considerable doubt on the professional and ethical standards of the Commercial Bank of Ethiopia. The practical argument that the Commercial Bank of Ethiopia has been making both under the Derg and now under EPRDF is that all those who have differences with the regimes in power run the risk of losing their money, or at least being inconvenienced for some time.
We hereby notify all our friends and contributors everywhere to stop sending money through our old account at the Commercial Bank of Ethiopia, Finfine Branch, until further notice.
At this critical time we need the support of our friends more than ever before. Take a step to contact and help us.