State in climbdown over money laundering

Conrad Dube

IN a major climb-down, the Reserve Bank of Zimbabwe, the Ministry of Finance and the Attorney General have conceded that the Bank Use Promotion and Suppression of Money Laundering Act Chapter 24:

24 violates the independence of the legal profession.


A possible amendment of the legislation is on the cards after a comprehensive joint review to be carried out by the Law Society of Zimbabwe, the RBZ, Finance ministry and AG’s office.


The lawyers had instituted a constitutional challenge in terms of Section 24 of the constitution the requirement for them to record, report and disclose information passed to them by their clients in confidence.


The obligations is in terms of Sections 24,25,26,27,28 and 29 of the Bank Use Promotion and Suppression of Money Laundering Act Chapter 24:24. The lawyers argued that such obligations violate a number of fundamental rights guaranteed by the constitution and the core values of the legal profession.


The sections require lawyers to record information from clients not for the client’s own use but for use by the government and law enforcement agents. They also require lawyers to report suspicious information and large cash transactions to incriminate the clients. Lawyers cannot disclose to the client the fact that the information has been passed on to third parties.


The constitutional challenge was postponed after the parties agreed to work out comprehensive and collaborative arrangements to ensure the prevention and deterrence of use of legal practitioners’ trust accounts for money laundering purposes without violating fundamental human rights and core values of the legal profession.


A copy of the memorandum of agreement to postpone the challenge, says: “The Bank Use Promotion of Money Laundering Act Chapter 24:24 requires a comprehensive review as it was enacted urgently to deal with a situation of monetary emergency which had arisen at the time it was promulgated.


“Such review should address issues such as compliance with internationally recognised human rights norms and the protection of the independence of the legal profession as well as attorney and client confidentiality.”


The parties agreed to establish a collaborative relationship between the Law Society and the RBZ and also to establish a framework for detecting, preventing and deterring money laundering without violating fundamental human rights or any of the core values of the legal profession.


In its application to the Supreme Court, the Law Society had argued that imposing the recording, disclosure and reporting obligations on designated institutions by some sections of the Suppression of Money Laundering Act violate core values of legal practitioners, particularly the duty by lawyers to observe confidentiality in respect of all communications received by them as legal practitioners.


They had also argued that no person shall be hindered in the enjoyment of his freedom of expression, freedom to hold opinions and to receive and impart ideas.


The lawyers argued: “The recording, disclosure and reporting requirements will deter full disclosure of all relevant information by clients to their legal practitioners and will consequently, interfere with the right to a fair trial in contravention of section 18 of the constitution.”


They also alleged the requirements violated the right to privacy and the right not to incriminate oneself.


“Lawyers act as agents of their clients. What they are compelled to disclose is as good as disclosed by their clients. Where information is incriminating, a situation whereby the client effectively incriminates himself, through his agent, is created. This is inconsistent with the right not to incriminate oneself,” the lawyers said.


The application is meant to stop the state from conscripting legal practitioners to act as state agents contrary to their clients’ interests.