THE Reserve Bank of Zimbabwe (RBZ)’s Financial Intelligence Unit (FIU) has raised concern over the shambolic state of record-keeping at the Department of Deeds, Companies and Intellectual Property, reported The Sunday Mail.
The FIU says this could compromise Zimbabwe’s listing as a low-risk country for money laundering and financing of terrorism by the Financial Action Task Force (FATF), the global financial crimes watchdog.
Zimbabwe is set to undergo a routine assessment by the FATF in 2026 to evaluate the country’s anti-money laundering systems.
In 2022, Zimbabwe was removed from the FATF’s grey list after three years.
Speaking at the launch of Zimbabwe’s third Money Laundering National Risk Assessment in Harare last week, FIU director-general Oliver Chiperesa said:
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.
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.
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.
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.
Chiperesa said that in the past, banks have been the preferred money laundering vehicle but increased regulatory oversight of banks in recent years has made it difficult for criminals to use financial institutions to wash their dirty money. He said:
Thus, criminals have had to innovate and find other ways of concealing the proceeds of crime from scrutiny, and they have found other intermediaries through which to launder the 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.
In terms of FAFT technical compliance, Zimbabwe is now classified as compliant with 36 of the 40 FATF recommendations. A 40/40 compliance rate is the target.