Three-month amnesty for those responsible for illicit fund flows out of Zimbabwe

Zimbabwe’s newly appointed president, Emmerson Mnangagwa, has granted individuals and corporates responsible for illicit fund flows (IFFs) out of Zimbabwe a three-month amnesty during which money and assets should be repatriated.

Trade misinvoicing is a common IFF typology across several sectors involved in international trade and there has been increasingly close scrutiny in this respect of practices employed by mining companies operating in Zimbabwe.

Amnesty duration

The amnesty runs for three months until the end of February 2018 during which period the government says the authorities will neither ask questions nor bring charges against those repatriating money or assets.

Individuals and companies that do not comply with the amnesty and fail to bring back money or assets will be prosecuted.

Central bank role

Individuals or company representatives wishing to comply with the amnesty must liaise the Reserve Bank of Zimbabwe.

The central bank has taken a lead in highlighting the negative impacts of IFFs on the economy. Estimates by the central bank suggest that in 2015, Zimbabwe suffered illicit outflows of an average of $150 million monthly.

The bank has said that IFFs during 2015-17 totalled US$3 billion, of which US$1.8bn cannot be properly accounted for while the remainder has been siphoned from the economy via misinvoiced management fees, service fees, technical fees and royalties.

Mining focus

Over recent years the focus has sharpened on the use of IFFs by Zimbabwe’s miners. A report commissioned by the African Economic Research Consortium and published in April 2016 identified widespread misinvoicing in the mining sector.

The authors of the report, Capital Flight and Trade Misinvoicing in Zimbabwe, say trade-based money laundering is particularly prevalent in trading of diamonds, gold and nickel.

The report concluded that in the 13-year period through to 2013, export misinvoicing of Zimbabwe’s diamonds alone amounted to US$1.3 billion.



Categories: Trade Based Financial crimes News