Zimbabwe has lost an estimated US$12 billion through illegal trade involving multinational companies in its mining sector according to a new report.

Falsified invoicing is the main method for facilitating the illegal financial flows according to the report entitled Capital Flight, Natural Resources and Institutions in Zimbabwe.

Metals and minerals
“Most of the metals and minerals mined locally are for the export market. This therefore presents a fertile ground for mis-invoicing – given that most of the companies in the mining sector are foreign owned,” according to the report.

It suggests that companies involved in the minerals and metals trade have been under-invoicing high value exports to numerous destinations.

Evidence
The report found that some companies had clearly declared a smaller amount of money received from exports than their trading counterparts reported as imports.

Over-invoicing of imports is also an issue according to the report, which says that companies have been accessing locally available foreign currency on the basis it would be used to import goods and service.

In reality, the goods and services – if they existed at all – were of a much lower value than specified on the invoice.

The full version of Capital Flight, Natural Resources and Institutions in Zimbabwe can be found here

Categories: Trade Based Financial crimes News