HARARE - The Financial Action Task Force (FATF), an inter-governmental body plans to visit Zimbabwe next month as part of escalated efforts to mitigate money laundering and combat the financing of terrorism.
Finance minister Patrick Chinamasa said that this development follows a successful evaluation done on the country by the monitoring body at a plenary meeting held in France two months ago where it was confirmed that Zimbabwe was now technically compliant.
“A mission would be coming to Zimbabwe over the period between January 19-20, 2015 to discuss further implementation modalities of legislative systems and institutional arrangements with various relevant stakeholders,” he said.
Chinamasa added that measures to be implemented include the ratification of relevant conventions and protocols, enactment of new laws, revision of existing ones, as well as gazetting of requisite regulations.
This comes as government early this year embarked on a National Risk Assessment (NRA) to identify, assess and
appreciate money laundering and terrorist financing risks facing the country.
Chinamasa said the results of the NRA, which are expected by year-end, would enable regulators to understand risks inherent in institutions under their jurisdictions.
“This would allow for the prioritised re-direction of resources towards higher-risk areas, and development of appropriate risk-based supervisory arrangements,” he said.
He added that the NRA would also help establish the extent of illicit financial flows in the economy arising from smuggling, tax evasion, transfer pricing, bulk cash movements, fraud, counterfeiting, bribery and kick-backs, among others.
According to a joint Afrodad and Zimbabwe Economic Policy Analysis and Research Unit (Zeparu) report, the country has lost about $3 billion through illicit financial flows (IFFs) in mining, wildlife, fisheries and timber industries between 2009-2013,mostly through under-invoicing by companies.
The $3 billion lost through IFFs is close to the country’s annual budget for 2014 of $4,2 billion.
Recently, Reserve Bank of Zimbabwe governor John Mangudya noted that rising IFFs have worsened the country’s liquidity crisis.
He said the number of IFFs reported by banks on a daily basis was surging. IFFs are a form of illegal capital flight and occur when money is illegally earned, transferred or spent.
Usually, the transactions can be generated in a variety of ways including trade mispricing and bulk cash movements.
“When transfers are made they should be bona fide transactions, but the problem with Zimbabweans is while the nation is crying over liquidity issues there are a few individuals busy transacting in IFFs,” Mangudya said.