Financial Crime World

Assessment of Anti-Money Laundering (AML) and Counter-Financing of Terrorism (CFT) System in Zimbabwe

Key Findings

The following key points highlight the current state of AML/CFT system in Zimbabwe:

Currencies Used

  • The USD, ZAR, and BWP are widely used in illegal transactions.

Remittances

  • Remittances from Botswana, South Africa, the USA, and the UK have increased significantly.
  • Official estimated figure of 5.9% of GDP in 2013.

Cash-Intensive Economy

  • Zimbabwe’s economy has become cash-intensive and informal, making it difficult for authorities to monitor transactions.

Externalization of Currency

  • The NRA identified externalization of currency as a major concern.
  • Individuals physically carrying cash across borders and legal entities transferring funds to foreign jurisdictions using personal or non-business accounts.

Banking Sector Vulnerability

  • The banking sector is considered the most exposed to risks of money laundering (ML) and proceeds of associated predicate crimes.

Risk Assessment

  • Zimbabwe’s risk level for terrorism financing (TF) is low, considering factors such as regional risk levels, understanding of TF threats, and absence of known TF or terrorism cases in the country.

Areas for Improvement

The following areas need to be addressed to enhance the AML/CFT system in Zimbabwe:

  • The legal basis for AML/CFT measures is not well-established.
  • No laws requiring competent authorities, FIs, and DNFBPs to adopt a risk-based approach.

BUPSMUL Unit Autonomy

  • The BUPSMUL Unit lacks the necessary legal framework to ensure adequate autonomy and operational independence.

Institutional Capacity

  • There is insufficient appreciation of AML/CFT requirements.
  • Low institutional capacity, which has negatively affected implementation and effectiveness.

Recommendations

To improve the AML/CFT system in Zimbabwe, the following actions are recommended:

Collating Statistical Data

  • Regularly updating the NRA and developing a common understanding of ML/TF risks.

Implementation of Preventative Measures

  • Enhancing implementation of preventative measures and supervisory actions on a risk-sensitive basis.

Financial Intelligence Analysis

  • Conducting integrated financial intelligence analysis using different sources of information.

Utilization of Financial Intelligence

  • Increasing utilization of financial intelligence by law enforcement agencies.

By addressing these areas, Zimbabwe can improve its AML/CFT system and reduce the risks associated with money laundering and terrorism financing.