FIU director
general Mr Oliver Chiperesa warned that the sector had become the single most
vulnerable spot in the country’s financial system.
“The national
risk assessment is a vital instrument in identifying, prioritising and
understanding risks associated with money laundering, which emanates from both
within and outside our borders,” said Mr Chiperesa.
Mr Chiperesa
also chairs the National Task Force on anti-money laundering (AML)/combating
the financing of terrorism (CFT) and countering proliferation financing (CPF).
He said the
just-completed third National Risk Assessment (NRA), covering the period
November 2023 to November 2024, rated Zimbabwe’s overall money laundering (ML)
risk at medium, pointing out that car dealers stood out as one industry with
the highest risk ratings.
According to
the NRA report, 95 percent of sampled car dealers import vehicles and trade
exclusively in United States dollar cash.
This cash-heavy
system, combined with the sector’s lack of licencing or supervision, makes it
fertile ground for criminals looking to launder proceeds of smuggling,
corruption and tax evasion.
Between 2019
and 2023, the country’s vehicle population jumped by 25 percent, from just over
1,23 million cars to nearly 1,6 million, creating what investigators describe
as a growing cash bazaar for illicit money.
“Car dealers
remain unregulated. The cash-intensive nature of their transactions makes it
difficult to trace the source of funds,” the NRA warns.
Out of the 14
sectors assessed by the bank, car dealers were the only sector categorised as
high risk in all three areas of threat rating, vulnerability rating and money
laundering risk.
The sector is
followed by real estate agents and precious metals and stones, which both rated
medium-high risk across three measured metrics.
The 2024
assessment identified smuggling (US$920 million), illegal gold and precious
metals trading (US$880 million), corruption (US$730 million), fraud (US$500
million) and tax evasion (US$300 million) among the top drivers of dirty money.
Together with
drug trafficking, these crimes generated an estimated US$6,15 billion over the
past five years, about 3,4 percent of Zimbabwe’s GDP.
Mr Chiperesa
stressed that the NRA was not just about exposing risks but also about shaping
stronger defences.
“By undertaking
this third NRA, Zimbabwe is not only aligning with international standards but
also reinforcing the country’s commitment to safeguard the safety and integrity
of the nation as well as the global financial systems,” he said.
Despite being
the backbone of financial transactions, the banking sector was rated medium
risk, with a low threat level but a medium-high vulnerability score. Products
most at risk included corporate banking, private banking, trade finance and SME
lending.
The report
acknowledged progress in compliance.
Most banks have
strengthened customer due diligence and suspicious transaction reporting
systems, while regulators have sharpened risk-based supervision. But weaknesses
remain. Banks’ compliance departments were found to be under-resourced, and
sanctions for non-compliant institutions were described as inadequate.
Recommendations
to address potential risks and threats include bolstering staff capacity at
both commercial banks and the Reserve Bank of Zimbabwe’s supervisory unit, and
introducing tougher penalties for breaches.
The securities
sector was rated medium-low risk, largely due to its reliance on electronic
transactions. However, new instruments such as contracts for difference (CFDs)
on the Victoria Falls Exchange were flagged as medium-high vulnerability.
The insurance
industry also came out as medium-low risk, thanks to limited cash exposure and
the establishment of a dedicated AML/CFT unit at the Insurance and Pensions
Commission. Still, the unit is under-resourced, and insurers face pressure to
strengthen compliance.
Real estate
agents, much like car dealers, were rated medium-high risk due to their
exposure to high-value cash transactions. The Estate Agents Council has
improved awareness of anti-money laundering obligations, but compliance remains
patchy.
The NRA urged
the council and the FIU to allocate more resources to monitoring the sector,
step up suspicious transaction reporting and enforce deterrent penalties.
Dealers in
precious metals and stones were rated medium-high risk, reflecting widespread
potential risks associated with smuggling and illegal gold trading between 2019
and 2023.
The report
noted that awareness of AML obligations in the mining sector is low and
recommended tighter controls at border posts, increased capacity for the
Ministry of Miness and stronger enforcement against rogue dealers.
Lawyers were
assessed as medium risk, with particular vulnerabilities in handling real
estate transactions and managing trust accounts. Some firms were found to act
as intermediaries for opaque company structures that can disguise beneficial
ownership.
The Law Society
of Zimbabwe has now made AML training mandatory before lawyers renew their
annual practicing certificates, a step praised in the report. But the NRA
warned that the sector still reports far fewer suspicious transactions than
expected given its risk profile.
Separate
thematic assessments flagged environmental crimes, particularly illegal mining
and forestry, as medium-high risk. Tax crimes were rated medium, with the
informal economy and cash businesses singled out as hotspots for evasion.
Meanwhile,
virtual assets such as cryptocurrencies are still little used in Zimbabwe, but
the NRA called for urgent regulation of virtual asset service providers.
Non-custodial wallets were found to pose the highest risk of being misused for
laundering or terrorist financing.
The findings
will underpin Zimbabwe’s Anti-Money Laundering and Counter Financing of
Terrorism (AML/CFT) Strategy for 2025–2029, which will tighten oversight of
high-risk sectors, plug loopholes in gold and car trading, and demand stricter
compliance from real estate and professional services.
“All relevant
stakeholders in the AML/CFT value chain need to be guided by the results of the
assessment in undertaking institutional or sectoral risk assessments and
deploying mitigatory measures,” Mr Chiperesa said.
The NRA process
drew participation from over 80 public and private institutions and lasted 12
months.
Authorities say
the upcoming five-year AML/CFT strategy will zero in on these sectors, with
measures including compulsory licensing, tighter supervision, and tougher
penalties. Herald
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