Return loot or face jail — ED

HARARE – President Emmerson Mnangagwa has indeed hit the ground running, issuing a chilling warning yesterday to individuals and corporates that externalised foreign currency to return the money within the next three months or face the full wrath of the law, the Daily News can report.

In a statement, Mnangagwa revealed that Operation Restore Legacy uncovered cases whereby huge sums of money and other assets were externalised by individuals and corporates, thereby prejudicing the country of the much-needed foreign currency.

Operation Restore Legacy refers to a military campaign that targeted “criminals” around the then president of the Republic, Robert Mugabe.

Launched in the wee hours of November 14, the operation caused several of Mugabe’s top allies to skip the borders as well as the arrest of several others, including former Finance minister, Ignatius Chombo who faces up to 55 years behind bars if convicted of charges of abuse of office, contravening the Prevention of Corruption Act and fraud.

Isolated, and deserted by party faithful, Mugabe eventually resigned to forestall an impeachment process that had been set in motion by his party, which had recalled him from the presidency five days earlier.

Emmerson Mnangagwa

President Emmerson Mnangagwa

It is against this background that Mnangagwa ascended to power.

As a first step towards the recovery of the externalised funds and assets, Mnangagwa said his administration is gazetting a three-month moratorium within which those involved in the practice can bring back the funds and assets with no questions being asked or risk charges being preferred against them.

“The period of this amnesty stretches from December 1, 2017 to the end of February 2018. Affected persons who wish to comply with this directive should liaise with the Reserve Bank of Zimbabwe (RBZ) for the necessary facilitation and accounting.

Reserve Bank of Zimbabwe

“Upon the expiry of the three-month window, government will proceed to effect arrests of all those who would not have complied with this directive, and will ensure that they are prosecuted in terms of the country’s laws.

“Those affected are thus encouraged to take advantage of this three-month moratorium to return the illegally externalised funds and assets in order to avoid the pain and ignominy of being visited by the long arm of the law,” said Mnangagwa.

The externalisation of foreign currency is a serious offence in Zimbabwe covered under the Money Laundering and Proceeds of Crime Act (Chapter 9:24) and the Exchange Control Act [Chapter 22:05].

In the event of a conviction, the courts can impose a fine not exceeding the value of the currency or a sentence of imprisonment not exceeding 10 years, the whole of which can be suspended on condition that the currency is repatriated to Zimbabwe within a specified period.

The statutes also allow the courts to impose harsher penalties unless the convicted person satisfies the court that there are special reasons in the particular case, which shall be recorded by the court, why a lesser fine should be imposed.

In his inaugural address to the nation on Friday, Mnangagwa said he was “hitting the ground running”, in view of the myriad challenges working against the country’s economy.

He spoke strongly against corruption and indiscipline which have contributed to the current sorry state of affairs in Zimbabwe.

“As we focus on recovering our economy, we must shed misbehaviours and acts of indiscipline which have characterised the past. Acts of corruption must stop forthwith. Where these occur, swift justice must be served to show each and all that crime and other acts of economic sabotage can only guarantee ruin to perpetrators,” he said in his maiden speech as president.

“We have to aspire to be a clean nation; one sworn to high moral standards and deserved rewards. On those ideals, my administration declares full commitment, warning that grief awaits those who depart from the path of virtue and clean business”.

Zimbabwe has struggled with the problem of foreign currency leakages for some time now.

Experts blame the loss of confidence in the country’s tottering economy which has seen the elite, in particular, preferring to keep their earnings in safe havens in contravention of the law.

The apex bank estimates that during the course of 2015, for example, $684 million was externalised by individuals for various purposes that include donations, investments, account transfers etc.

In addition, $1.2 billion export sales proceeds were externalised by firms through transfer pricing, under-invoicing and high management and expert fees.

The RBZ is currently investigating leads obtained from the Panama Papers whereby nearly 300 Zimbabweans were said to have committed serious economic crimes.

The Panama Papers refer to an unprecedented leak of 11,5 million files from the database of the world’s fourth biggest offshore law firm, Mossack Fonseca.

The records were obtained from an anonymous source by the German newspaper Süddeutsche Zeitung, which shared them with the International Consortium of Investigative Journalists (ICIJ).

The ICIJ then shared them with a large network of international partners, including the Guardian and the BBC.

With the country in the grips of a paper money shortage since March 2016, market watchers suggest illicit financial flows are partly to blame.

The scourge has mopped liquidity from the market, worsening an already tenuous cash crisis.

Symptomatic of the liquidity crunch, banks are currently limiting cash withdrawals with desperate clients having to sleep in bank queues to access their hard-earned money.

Circulating this liquidity within the national economy has a great multiplier effect and has a positive contribution to boosting aggregate demand.

Barely a week after his swearing in on Friday, Mnangagwa said he is committed to reviving the country’s economy left in tatters by his predecessor, Mugabe.