Daniel Nemukuyu Investigations Editor
Those illegally moving money out of Zimbabwe and stashing it offshore, including those who are laundering funds acquired criminally, are being tracked down and the Zimbabwe Anti-Corruption Commission with the help of foreign banks has managed to identify some culprits, including top bank managers, and is now firming up the evidence for prosecution.
Internally banks, and now mobile money operators, are taking a lot more seriously the need to report suspicious transactions, often when money acquired criminally is being brought into the formal systems for cleaning, and this has helped to boost Zimbabwe’s status in global banking circles, a status that was a bit dubious a few years ago.
Zimbabwe loses billions of dollars annually through money laundering and ZACC sees this as corruption and so has been hunting down the culprits and investigations are underway to establish the truth or falsity of information so far obtained, and once the cases are firm the culprits face arrest and trial with all the publicity.
Addressing bank executives and othe anti-graft stakeholders at a financial crimes indaba in Harare yesterday, ZACC deputy chairperson Commissioner Kuziva Murapa invited those who have stashed monies outside the country to open up, seek a stay in criminal investigations and proceedings while the money is returned, and do this before the investigators strike.
Comm Murapa said banks in the foreign countries where the funds were hidden are willing to assist and the net was now closing in on the money laundering culprits. In recent years banks around the world have been co-operating more and more on eliminating money laundering and on illegal movements of money, even if the object is just to avoid rules on capital transfers or for tax evasion.
“In collaboration with the countries, where the money is stashed, we have managed to identity some of the culprits. Banks in those jurisdictions are now prepared to assist us in our investigations.
“If you are in this position and you have stashed the money outside the country, we advise that you approach us earlier for a moratorium before we approach you.
“We even understand that in some cases, executives of local banks are stashing their money in off-shore accounts. If you (bank leaders) do not have confidence in an institution that you lead, then who do you expect to have confidence in it. This must stop forthwith and as ZACC, we will investigate this and expose the culprits,” said Comm Murapa.
Comm Murapa said banks are also being used as conduits of tainted money as they blindly or deliberately process the transactions without due diligence or seeking to trace the source.
“We have noted that some banks’ involvement as conduits of proceeds of ill-gotten money from the public sector. We are warning you that this must stop. Many banks continue to provide the corrupt with a haven to stash their dirty money. This loophole is due to both overall lax enforcement of anti-money laundering regulations and the way that banks currently undertake due diligence,” he said.
Corrupt individuals, ZACC said, often turn to banks and other financial institutions to clean their dirty monies by bringing them into the formal financial system.
Speaking at the same function, Reserve Bank of Zimbabwe Governor Dr John Mangudya said there was an improvement in the rate at which banks were now reporting suspicious transactions to the central bank’s Financial Intelligence Unit.
Dr Mangudya said Zimbabwe, which was placed on the grey-list of non-compliant jurisdictions in the international fight against money laundering and other financial crimes in 2019, was recently accorded a vote of confidence following a significant improvement noted in the past two years.
The Financial Action Task Force, which is tasked with the responsibility of setting and monitoring implementation of global standards for combating money laundering and related financial crimes, endorsed Zimbabwe after realising an improvement in implementation and enforcement of anti-money laundering by banks.
FATF also noted an improvement in the understanding of money laundering and terrorism financing risks by most stakeholders.
Zimbabwe also made great strides in putting in place legal and institutional framework for identifying ultimate beneficial owners of legal persons among other improvements.
Since 2017, the number of reports made to the FIU by local banks increased from 1 245 in 2017 to 1 743 in 2018 and then in 2019, the figure jumped to 2 968.
This year, the banks have so far made 2 159 reports of suspicious transactions.
Mobile money operators did not make any reports in 2017 and 2018 but in 2019 they made 102 reports. The figure increased to 141 in 2020 and this year 1 265 reports have so far been made to the FIU.
Precious stone dealers, lawyers, accountants, casino operators and estate agents have over the years, not filed any reports.
Dr Mangudya said banks are obliged to notify the FIU of any suspicious transaction for the purposes of prosecution and recovery of property.
The FIU will in turn, write intelligence reports to either ZACC or the police for further investigation and criminal prosecution.