The Reserve Bank of Zimbabwe (RBZ)’s Financial Intelligence
Unit (FIU) has since raised concern over the shambolic state of record-keeping
at the department, which it says creates loopholes that could be used for money
laundering.
Zimbabwe is set to undergo a routine assessment by the FATF
in 2026 to stress-test the country’s anti-money laundering systems.
FATF is an intergovernmental organisation established to
set global standards to prevent and detect money laundering and terrorist
financing, as well as promote effective implementation of these criteria
worldwide.
Last year, Zimbabwe was removed from the FATF’s grey list
after three years.
There were concerns the country’s financial system did not
have enough safeguards to stop the flow of dirty money.
The listing placed a huge premium on financial transactions
involving Zimbabwe and other countries, which then received extra scrutiny by
banks.
Some international banks consider these extra measures
costly and end up completely cutting off the affected country.
Speaking at the launch of Zimbabwe’s third Money Laundering
National Risk Assessment in Harare last week, FIU director-general Mr Oliver
Chiperesa said the situation at the Department of Deeds, Companies and
Intellectual Property could affect the country’s status.
FATF rules require countries to have effective mechanisms
to ensure accurate and up-to-date information on beneficial ownership of
companies and trusts is collected, maintained and readily available and
accessible to competent authorities to investigate money laundering and
terrorism financing cases.
“While we have in place the necessary laws to ensure this
happens, sadly, those tasked with running our companies’ registry have over the
years let us down, and it is about time something drastic is done to ensure
efficiency and effectiveness at our companies’ registry offices,” said Mr
Chiperesa.
“Without a functional registry of beneficial ownership
information, it will be difficult for Zimbabwe to convince international
assessors that we are serious in terms of combating money laundering.”
Zimbabwe, he said, is due to be assessed in early 2026.
“Even if we eventually manage to put in place a functional
beneficial ownership registry a few weeks before the assessment starts, that
will be too late,” warned Mr Chiperesa.
“The assessors look at data over a period of time, up to
five years, to judge how well a country is effectively implementing anti-money
laundering requirements.”
He said banks have historically been the preferred money
laundering vehicle because they provide the most direct and simple means of
getting dirty money into the financial system.
Enhanced regulatory oversight of banks in recent years, he
said, had made it increasingly difficult for criminals to use financial
institutions as conduits for money laundering.
“Thus, criminals have had to innovate and find other ways
of concealing proceeds of crime from close scrutiny, and they have found other
intermediaries through which to launder proceeds of crime.
“Real estate agents, lawyers, accountants, precious stone
and precious metal dealers, car dealers and the use/abuse of shelf companies
all remain areas of concern used by criminals to launder dirty funds.”
The FATF assesses countries periodically to measure the
extent to which their anti-money laundering and counter-financing of terrorism
regimes comply with its rules.
In terms of FAFT technical compliance, Zimbabwe is now
classified as compliant in 36 of the 40 FATF recommendations. A 40/40
compliance rate is the target. Sunday Mail
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