The FIU, which is the Reserve Bank of Zimbabwe (RBZ)’s
investigations arm, referred over 140 cases of alleged financial crimes
relating to currency manipulation to law enforcement agencies for further investigations
over the same period.
To date, 82 cases of alleged breaches of financial
regulations have been referred to the Criminal Investigations Department
(Commercial Crimes Division), while six cases were handed over to the Central
Intelligence Organisation Counter Terrorism Unit.
The Zimbabwe Anti-Corruption Commission (ZACC) is also
investigating 11 other cases, while the Zimbabwe Revenue Authority is
conducting further investigations into 41 cases referred to the taxman by the
FIU.
A single case is with the RBZ’s Exchange Control Division.
The Sunday Mail understands that some of the businesses
that were flagged by the FIU were the alleged top financiers behind black
market foreign currency trading.
Other businesses were accessing forex through the RBZ
Foreign Currency Auction before pegging prices of their goods and services
using the black market exchange rates.
The imposition of harsh financial sanctions by the FIU
coupled with the ongoing criminal investigations by law enforcement agencies
constitute a cocktail of response measures being implemented by authorities to
stop manipulation of the local currency, which has fuelled inflation and
currency volatility.
The far-reaching response measures to arrest the blatant
sabotage of the Zimbabwe Dollar have also witnessed the FIU freezing bank
accounts belonging to dozens of businesses.
The central bank has also put banks with weak Know Your
Customer systems on notice, with the threat of severe financial sanctions
looming large.
KYC systems are standards designed to protect financial
institutions against fraud, corruption, money laundering and terrorist
financing.
In an interview with The Sunday Mail, FIU director general
Mr Oliver Chiperesa said the ongoing blitz was targeting illicit currency
manipulation through local banking systems.
“There are those companies that we have fined ourselves as
the FIU using administrative sanctions, they were around 150 last year.
“To date, there are now 206 companies fined by the FIU
through administrative sanctions,” said Mr Chiperesa.
“Then there are cases that we refer to law enforcement
agencies, that is the ZRP, ZACC and ZIMRA and so on. We have so far referred
141 cases.”
He, however, said the prosecution of cases referred to law
enforcement agencies was below par.
Mr Chiperesa said as a result of the FIU’s investigations,
dozens of companies have been blacklisted from accessing the RBZ forex auction.
“Every week we have companies that are being disqualified
from the auction for various forms of abuse.
“Repeat offenders will be barred from accessing the auction
altogether. As regulators, we have noted that some banks are submitting
applications on behalf of their clients without doing enough due diligence.
“The Central Bank has now come up with stiff penalties
against banks who have lax Know Your Customer platforms (KYC) and who are found
to have facilitated fraudulent applications to come through to the auction.”
Mr Chiperesa said the FIU will not spare businesses that
are pegging prices of their goods and services using the parallel market
exchange rate while accessing foreign currency through the RBZ auction.
“The FIU has frozen accounts of dozens of companies that
engage in this type of malpractice which amounts to exchange rate
manipulation,” he said.
Mr Chiperesa said the blitzkrieg against currency
manipulators was beginning to bear fruit with the exchange rate movements
slowing down over the last two months.
“We do not share the sentiment that the Zimbabwe dollar has
been losing value at an alarming rate,” he said.
“The rate of depreciation on the parallel market has slowed
down over the last year and has been stable over the last two months or so on
the back of a combination of prudent measures by the fiscal and monetary
authorities which have restricted money supply.
“But the following are the key factors that tend to push
the parallel market rate up: Whenever there is a huge injection of Zim dollars
into the market, either by Government making payment to goods and service
providers, which in most cases is unavoidable or by private sector players
seeking to offload huge ZWL balances in exchange for US dollars. The second and
very important factor that tends to push the rate up is the current trend
whereby economic players, whether corporate or individual, whenever they get
Zimbabwe dollars, they want to immediately convert them to US dollars as a
store of value thus creating a high and artificial demand for US dollars. The
third factor pushing demand are goods and service providers who demand payment
in cash, even those that do not need to import anything.
“This forces the ordinary consumer to also go and buy the
US dollar on the parallel market, again creating artificial demand.”
Mr Chiperesa said monetary and fiscal authorities are
implementing measures that promote greater demand and use of the domestic
currency.
Last month, the FIU ordered the freezing of bank accounts
for four companies citing suspicious activities related to money laundering
activities.
The companies – Geribrian trading as Transervet, Powerspeed
trading as Electrosales, Halsted and Enbee – were barred from withdrawing money
from their accounts until the conclusion of the FIU’s investigations.
The Central Bank is on a drive to rein in market
indiscipline, which has seen businesses taking advantage of lax regulations to
profiteer while in the process manipulating the exchange rates to their
benefit.
A Chinese restaurant in Harare, Shangri-La, was also slapped with a US$30 000 fine for pegging prices way ahead of the official exchange rates last month. Sunday Mail
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