The FIU is a
national agency responsible for detecting, preventing and combating financial
crimes, particularly money laundering, terrorist financing and proliferation
financing.
Its mandate
includes collecting, analysing and disseminating financial intelligence to
prevent illicit financial activities and ensuring compliance with anti-money
laundering, counter-terrorist financing and counterproliferation financing
(AML/ CTF/CPF) laws.
According to
the FIU, between 2019 and 2024, money laundering activities cost the country an
average of US$1,23 billion annually.
“Estimates
suggest the total proceeds could be as high as US$6,15 billion over the same
period, equating to approximately US$1,23 billion annually.
“This figure
represents 3,4% of Zimbabwe’s 2023 GDP of US$35,2 billion, underscoring the
substantial impact of financial crime on the national economy,” the FIU said in
its annual report for 2024.
Money
laundering is the process of making illegally obtained funds appear legitimate.
The report
analysed 16 predicate crimes during the period under review, with six
identified as the main sources of illicit proceeds.
“The illicit
proceeds were largely generated from six predicate crimes, with smuggling
accounting for US$920 million, followed by illegal gold and precious stones
trade (US$880 million), corruption (US$730 million), fraud (US$500 million),
tax evasion (US$300 million) and drug trafficking (US$170 million),” the FIU
report said.
Despite some
enforcement progress, the FIU observed that Zimbabwe's vulnerability to money
laundering worsened over the same period.
“Zimbabwe’s
vulnerability to money laundering increased during the same period, with the
overall rating rising from medium to medium-high, and the vulnerability score
increasing from 0,52 in 2019 to 0,62 in 2024,” the report said.
The trend,
according to the FIU, is largely driven by Zimbabwe’s highly informal and
cashheavy economy, where more than 90% of transactions are conducted in cash,
mostly US dollars, making it difficult to trace funds or enforce regulations.
“This
deterioration was primarily driven by the country’s highly informal, cash-based
economy… posing significant challenges for traceability and oversight,” the
report said.
The report
flagged car dealerships as the high-risk sector due to their exclusion from
antimoney laundering laws and the prevalence of high-value cash transactions
with little to no regulatory oversight.
“The car
dealers sector was identified as the most vulnerable, with a high risk,
primarily due to its cash-intensive nature and lack of regulatory oversight,”
it said.
Other high-risk
sectors identified include precious metal and stone dealers, the real estate
industry and the legal profession.
“Precious stone
and metal dealers and the real estate sector were rated medium-high, driven by
high-value transactions, cash activities and ineffective compliance controls,”
the report noted.
“Lawyers also
faced mediumhigh vulnerability due to their involvement in high-risk
transactions.”
The banking
sector was rated medium risk, with weaknesses identified in corporate banking,
private banking and trade finance.
However, it was
credited for having a strong legal framework and well-trained personnel.
“Despite these
challenges, the sector benefits from a robust legal and regulatory AML
framework, risk-based approaches and well-trained staff,” the FIU added.
Meanwhile, the
insurance and securities sectors were deemed relatively low risk, though
concerns remain around investment management and the rise of new financial
instruments such as contracts for differences traded on the Victoria Falls
Stock Exchange. Newsday
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