Financial Crime World

Title: FinCEN-like Definitions of Financial Crimes Introduced in Zimbabwe’s Money Laundering Act

Background

Harare, Zimbabwe - The Zimbabwean government has taken strides in strengthening its Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) regime by introducing clear definitions of key financial crimes under the Money Laundering and Proceeds of Crime Act (MLPCA). Here’s a look at the new definitions:

Money Laundering

  • Definition: Money laundering is defined as any act or attempt to conceal or disguise the illicit origin of funds or to convert proceeds of crime into legitimate assets. Money laundering offenses include any activity that aids, abets, or facilitates money laundering.
  • Impact: These definitions provide a solid framework for law enforcement agencies and financial institutions to effectively identify and report suspicious transactions.

Terrorist Financing

  • Definition: A terrorist financing offense is defined as any act or attempt to provide funds for terrorism or to raise, collect, transfer, or otherwise make available funds for the commission of a terrorist act.
    • Terrorist Acts: Terrorist acts are defined as acts of violence or harm intended to cause fear among a population or designed to intimidate a government or international organization.

Organized Criminal Groups and Political-Exposed Persons

  • Organized Criminal Groups: An organized criminal group refers to a structured association of three or more individuals intending to commit serious offenses for financial or other material benefits.
  • Political-Exposed Persons (PEPs): PEPs are individuals holding a prominent public function, including governmental, political, administrative, or judicial functions, as well as their family members and close associates.

Financial Institutions and Designated Non-Financial Businesses and Professions

  • Financial Institutions: Financial institutions are entities engaging in activities such as accepting deposits, providing loans, currency exchange, and investment services, among others.
  • Designated Non-Financial Businesses and Professions (DNFBPs): Also subject to AML/CFT regulations are DNFBPs like accountants, lawyers, and real estate agencies, among others.

Beneficial Owners

  • Definition: The term “beneficial owner” is defined as the natural person ultimately owning or controlling the rights to or benefits from a legal entity.
  • Impact: This definition aims to help prevent the use of anonymous shell companies for money laundering and terrorist financing activities.

Information Sharing

  • Provisions: The act lays out provisions on the sharing of information between the Unit, competent supervisory authorities, and other relevant government departments to ensure effective implementation and enforcement of the AML/CFT framework. ( Sections 3 and 4)

Conclusion

These comprehensive definitions provide more clarity and improve the effectiveness of Zimbabwe’s AML/CFT efforts, in line with international standards set by organizations like the Financial Action Task Force (FATF). The new definitions come into force immediately upon the Act’s publication, and relevant stakeholders are encouraged to familiarize themselves with the updated terminology to ensure compliance with the new requirements.