Countries/Jurisdictions of Primary Concern - Zimbabwe
Zimbabwe is not a regional financial center, but it faces problems related to money laundering and corruption. Serious financial crime in Zimbabwe generally may appear in the form of various violations of exchange control rules; underground banking; cross-border crime; organized syndicates, both domestic and international; and increased cooperation among criminal networks and links with legal business activity, resulting in serious corruption and bribery. Regulatory and enforcement deficiencies in Zimbabwe’s AML/CFT regime expose the country to illicit finance risks, but there are no reliable data as to the actual extent of the problem. Commercial banks, building societies, moneylenders, insurance brokers, realtors, and lawyers in Zimbabwe are all vulnerable to exploitation by money launderers. Nearly all transactions in Zimbabwe are carried out with either the U.S. dollar or the South African rand.
The United States, Canada, Australia, and the EU have imposed targeted financial sanctions and travel restrictions on some political leaders and a limited number of private companies and state-owned enterprises for complicity in human rights abuses or for undermining democratic processes or institutions in Zimbabwe. Effective November 1, 2014, the EU lifted Article 96 restrictions, which previously limited EU development assistance to Zimbabwe. Currently, the EU maintains active restrictions against President Mugabe, Grace Mugabe, and Zimbabwe Defense Industries, an arms embargo, and suspended restrictions on 89 individuals and eight entities. The EU reviews its restrictions annually in February. Although the EU delisted the Zimbabwe Mining Development Corporation (ZMDC) and the Minerals Marketing Corporation of Zimbabwe (MMCZ) from its list of sanctioned entities in September 2013, the United States maintains sanctions on the ZMDC and MMCZ, so it remains illegal for U.S. persons to transact with these corporations.
For additional information focusing on terrorist financing, please refer to the Department of State’s Country Reports on Terrorism, which can be found at: //2009-2017.state.gov/j/ct/rls/crt/
Do FINANCIAL INSTITUTIONs engage in currency transactions related to international narcotics trafficking that include significant amounts of US currency; currency derived from illegal sales in the U.S.; or illegal drug sales that otherwise significantly affect the U.S.: NO
criminalizATION OF money laundering:
“All serious crimes” approach or “list” approach to predicate crimes: All serious crimes
Are legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: YES Domestic: YES
KYC covered entities: Commercial banks, acceptance houses, discount houses, money transfer agencies, bureaux de change, legal practitioners, accounting firms, pension funds, real estate agents, cash dealers, and finance houses
Number of STRs received and time frame: 355: January 1 - October 31, 2014
Number of CTRs received and time frame: Not applicable
STR covered entities: Commercial banks, acceptance houses, discount houses, money transfer agencies, bureaux de change, legal practitioners, accounting firms, pension funds, real estate agents, cash dealers, and finance houses
money laundering criminal Prosecutions/convictions:
Prosecutions: Not available
Convictions: Not available
Records exchange mechanism:
With U.S.: MLAT: NO Other mechanism: NO
With other governments/jurisdictions: YES
Zimbabwe is a member of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), a FATF-style regional body. Its most recent mutual evaluation can be found at: http://www.esaamlg.org/userfiles/Zimbabwe_detailed_report.pdf
Enforcement and implementation issues and comments:
The government sometimes abuses AML legislation for political purposes. More broadly, widespread corruption impedes the proper implementation of Zimbabwe’s AML/CFT regime.
Although several reform-oriented ministers from the opposition party are no longer in the government, Parliament’s 20 portfolio committees, including some chaired by opposition members of parliament, continue to offer opportunities for oversight of the executive branch. For example, the Ministry of Finance has promised to tighten controls in future legislation and to enhance the revenue authority’s oversight of the production and sale of diamonds. Ultimate responsibility for this legislation lies with the Ministry of Mines and Mining Development. The ministry has not yet produced a draft act, but the new Minister of this department has promised to improve accountability within the diamond mining sector. In 2014, Zimbabwe passed laws criminalizing human trafficking and piracy.
Regulation and enforcement in the financial sector is weak, mainly due to a lack of trained regulators and financial crimes investigators. Regulatory and law enforcement agencies lack the resources to effectively combat money laundering, and many financial institutions are unaware of – or simply fail to comply with – their obligations to file STRs. Zimbabwe’s framework to freeze terrorist assets has yet to be proven effective. Financial institutions typically receive information related to UN designations from private sources or companies rather than from the government. In 2013, Zimbabwe issued regulations aimed at beginning its implementation of its obligations to identify and freeze terrorist assets under UNSCRs 1267 and 1373.
The Money Laundering and Proceeds of Crime Act (MLPCA), enacted in 2013, widens the applicability of the Criminal Matters Act (CMA), which deals with mutual legal assistance (MLA). The MLPCA appears to amend the CMA to make MLA available for the investigation and prosecution of terrorist financing, but this has not yet been demonstrated. While the MLPCA appears to have removed key legal impediments to MLA, only effective implementation of the CMA, as amended, will demonstrate a lack of practical impediments.
There were a number of prosecutions and convictions for money laundering in 2013, although the exact figures are not available because there is no centralized system for compiling and collating such statistics. Between January and October 2014, the FIU referred 15 cases to the relevant law enforcement agencies for further investigation. The outcomes of those investigations, as well as the 15 referred to law enforcement during the same timeframe in 2013, are still pending.
Zimbabwe should continue to make progress on its AML/CFT regime and work to ensure its financial intelligence unit is fully operational and effectively functioning. Additionally, Zimbabwe should ensure that implementation of the MLPCA is underway.