ED's 'looters' list violates law

HARARE - Business lobby groups have denied their members illegally stashed hundreds of millions of dollars overseas, saying they just did not acquit their foreign payments on time.

Unless proven otherwise, claims of externalisation of foreign exchange by government could expose the ruling administration’s ignorance in constitutional, administrative and bureaucratic issues.

The country’s largest industrial lobby group — the Confederation of Zimbabwe Industries (CZI) — told the Daily News yesterday that the list released by President Emmerson Mnangagwa on Monday, speaks to issues that happened during trading, adding it had serious flaws.

“Some import, some export. If you look at the importers list, you will see that these are companies that require raw materials in their operations. They have paid for goods where there have been delays in terms of delivering them. Because they have exceeded 90 days, they have now been categorised as externalisers,” said CZI president, Sifelani Jabangwe.

In business, when you import or export, you are given 90 days to clear your Customs Declaration 1 Forms, otherwise known as CD1 forms.

A CD1 form specifies the value of exports, commissions and freight.

It is required to facilitate export shipments and represents the declaration by the exporter of the export and undertaking that payment shall be received within the stipulated period.

In the absence of a properly completed CDI form and other supporting documents, the Zimbabwe Revenue Authority (Zimra) may prohibit the export.

Jabangwe said most of their members had appraised their bankers as to what the issues were and were surprised to see their names amongst those named and shamed by Mnangagwa.

He said some of them were grappling with late payments while others were frantically trying to recover bad debts.

“Business must work with government to separate the true business transactions and externalisers so that action is taken against true externalisers,” he said, adding “we do not want this to hide those that have truly externalised”.

This comes after Mnangagwa’s government on Monday released the long-awaited list of companies and individuals alleged to have failed to return $827 million stashed abroad following the expiry of a 14-week-long amnesty.

Mnangagwa, who came to power through a soft coup in November last year that toppled long-ruling despot Robert Mugabe, said $591 million of the $1,3 billion suspected to be stashed overseas has been returned after individuals and companies reportedly came forward in droves to confess their misdeeds.

He said he would waive penalties for those who returned the cash and no legal action will be taken, but did not name those who have repatriated the funds.

Divine Ndhlukula, president of the Zimbabwe National Chamber of Commerce, said a number of their members have said it was a matter of late acquittals.

“Some of the companies we have spoken to is the question of acquittal. There were no hard and fast rules on acquittals. People just paid but never bothered to acquit. A number are looking for invoices to go and acquit,” she said.

“Banks generally were not asking for acquittals. People were not aware, there is education required,” said Ndhlukula, founder and managing director of Securico, one of the largest security service providers in the country.

Bankers Association of Zimbabwe president Charity Jinya was not taking calls from the Daily News yesterday.

But a top Harare banker warned on Monday that government has broken the cardinal rule of banking confidentiality, and sadly, they got it all wrong.

Veteran lawyer and former Finance minister Tendai Biti said government has lurched into a legal minefield.

Biti contested the legal definition of externalisation, adding that not filling acquittals was not externalisation.

“Publishing a Mickey Mouse list without legal clarity is defamatory and inexcusable. Particularly if that list refers to illicit financial flows, which is a different issue,” said Biti.

He, however, said it was quite clear that the mining sector remains the bedrock of illicit financial flows which are costing Africa a trillion dollars annually, much more than all the foreign aid into the continent.

“Category Three on the list are 90 percent Chinese nationals transferring money to Chinese banks. The question is; where are they getting this money given small Chinese imprint in Zimbabwe? It is clear that there is rampant Chinese looting and rape of this economy,” he said.

“The sum of $464 million on the list is a paltry amount given the haemorrhage in the country from corruption and illicit financial flows. Diamonds alone were $15 billion. The legitimacy and credibility of the list is undermined by those that are not there, those that we know.”

Crisis in Zimbabwe Coalition spokesperson Tabani Moyo said the list does not expose anything but simply outlines businesses that have been caught up in technicalities as they try to survive in the quicksand Zimbabwean socio-economic and political environment.

“What is immediate is that the real ‘tenderprenuers’ and ‘stateprenuers’ are out there and free,” he told the Daily News.

“If the whole process was genuine rather than acting as a smokescreen for scoring cheap points on elections, it was going to expose how the ruling party and its syndicates exploited resources in Marange, leading to more than 15 billion being lost through complex illicit networks.

“The people of Zimbabwe require strong leadership that firmly addresses challenges facing the nation rather than this knee-jerk process of furthering narrow interests at the expense of the nation.”

Stephen Chan, a professor of world politics at the School of Oriental and African Studies at the University of London, said the “naming and shaming” of companies who have not yet repatriated funds held overseas is a sign of desperation on the part of the government, especially as the total amount owed is only half-a-billion dollars.

“But it seems that liquidity problems in Zimbabwe are now so great that even half-a-billion is seen as important,” Chan told the Daily News.

“However, the move could be self-defeating. Insofar as much of the money relates to foreign accounts run by mining companies, repatriating money could lessen their ability to purchase equipment readily and speedily.

“Only a fraction of the money is thought to have been accumulated by corrupt practice. Seriously, corrupt money would be laundered and hidden better. In some ways, the move by the government may be simply symbolic politics, but it does smack of a running out of economic options,” said Chan.

Experts with a grasp of international trade and financial flows said government should have simply contacted the named organisations directly or contact their banks to clear and acquit their CD1 forms.

Legal experts said there was blatant breach of the rule of law and the legal doctrine of presumption of innocence.

They said when investigators or auditors are doing their work; they don’t publish anything until they have sought a response from the auditee.

Even when they want to publish a list of debtors, they do what is called “debtor circularisation” a technique used by an auditor in which all debtors to a company are asked to confirm the amounts outstanding or to reply if the amount stated is incorrect or in dispute.

    Comments (4)

    My company is on this list. The President says there was a notice given to those on the list. Both my bank and my company never received any notification to clear the CD!'s in question. The President was misled into labeling those who did not acquit CD1's as externalisers. What should have been done was a communication with Banks as Authorised Dealer to clear issues with their clients before publishing. A few years back Gono gave notice to all uncleared CD1 holders to clear them and the process and it was done. Banks used to follow up with companies at the end of the 90 day period on a fortnight basis with their clients to clear outstanding CD1's. My bank does not do this but i know for certain Barclays used to do these follow ups on a regular basis. At the same one must not put aside the need for discipline in the way we do business and observe the regulations as much as possible.

    Kambiri - 21 March 2018

    Either ED thinks we as a nation are a very stupid lot or he himself falls into that category. Furthermore, he must really look at his advisory team. They are certainly not doing him any good. For example, his attendance at the Kazungula bridge that circumverts Zimbabwe. Really, how stupid can one be? And those unpresidential dreary brown safety shoes. Finally the 'Paraffin Scarf' in this summer season. How silly can one really be? Soon ED will be putting on a multicolour raincoat as soon as the rains are gone, with his minion ministers sheepishly following suit.

    Sis Emma - 21 March 2018

    As a nation on this one the banking sector has let down the whole nation. Banking sector from RBZ to the authorized dealers. Some of my clients acquitted their advance payments but their banks and RBZ never updated the CEBAS. The individuals in the banking sector are equally economic saboteurs as this scares away would be investors, damages images of the particular companies who happen to be their customers and paymasters-the reason the banks are in business. Defamation of companies and their directorate all because of some few individuals who are not inclined towards a positive contribution to our economy. RBZ I challenge you to use the list to verify the integrity of banks whose clients are on the list. Publish the banks, banks response and client response. This is of national interest.

    Business - 22 March 2018

    @Sis Emma....that scarf worked well in the snow in Davos, but it is now quite ridiculous as you mention.

    jake - 22 March 2018

    Post a comment

    Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
    Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
    - Editor

    Your email address will not be shared.