A comparative statutory analysis of the regulation of money laundering in Zimbabwe

Abstract

Money laundering is the process whereby criminals mask the actual origins of their criminally acquired proceeds and profits, in order to integrate the illegal proceeds within legitimate financial markets and financial institutions. Money laundering usually occurs after the commission of a primary criminal offence which in turn has the effect of generating a financial benefit, for example, drug trafficking. The Money Laundering and Proceeds of Crime Act (MLPC Act) as amended, is the primary legislation that outlaws money laundering in Zimbabwe. In this regard, the MLPC Act establishes several statutory means to counter and curb money laundering activities in Zimbabwe. For example, the implementation of customer due diligence procedures as a means to assess the money laundering risk which is posed by customers on financial institutions. Several regulatory and enforcement authorities of Zimbabwe such as the Financial Intelligence Unit (FIU), the Criminal Investigations Department of the Zimbabwe Republic Police (ZRP) and the National Prosecuting Authority of Zimbabwe (NPAZ) as well as other regulated entities play a significant role in combatting money laundering in Zimbabwe. This research is informed by the weaknesses and inconsistencies in the enforcement of anti-money laundering (AML) laws in Zimbabwe. It investigates whether the current anti-money laundering laws are sufficiently robust and consistently enforced to effectively curb money laundering practices therein. Owing to several challenges, including rampant systemic corruption in Zimbabwe, the lack of political will to implement AML measures, a lack of adequate resources to implement AML measures, a largely informal financial sector and the lack of adequate enforcement measures, the researcher found that the AML regulatory framework of Zimbabwe is not sufficiently robust and adequate enough to curb and combat money laundering in Zimbabwe. As a developing economy that is affected by the lack of adequate resources and relevant infrastructure to effectively implement AML measures, Zimbabwe is faced with money laundering challenges that have affected the integrity of its financial markets. The systemic corruption and looting of state resources also pose a significant challenge to Zimbabwe's AML regime. In light thereof, this thesis also aims to establish solutions and measures that can be implemented to impede and detect money laundering in Zimbabwe and therefore enhance the AML provisions which are provided under the MLPC Act. In light thereof, this thesis also aims to establish solutions and measures that can be implemented to impede and detect money laundering in Zimbabwe and enhance the AML provisions which are provided under the MLPC Act. This research is a comparative study of Zimbabwe's AML laws with those of South Africa, the United Kingdom (UK) and Australia, respectively. These jurisdictions present plausible lessons for Zimbabwe to enhance its AML framework. Some lessons include the establishment of special courts to prosecute money laundering cases in Zimbabwe, the establishment of more stringent penalties for AML offences, enhancing AML enforcement measures, AML education and awareness and encouraging regulatory cooperation between Zimbabwe's financial intelligence unit and other financial intelligence units internationally. The researcher hopes that the findings made in this thesis will be used by policy makers to enhance AML laws and enforcement measures to combat and curb money laundering in Zimbabwe.