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Money laundering Act obsolete

Eric Chiriga

THE Bank Use Promotion and Suppression of Money Laundering Act has been criticised for having already outlived its usefulness. The Act was passed earlier this year.

T face=”Verdana, Arial, Helvetica, sans-serif”>Most provisions of the Act are said to be similar to the Presidential Powers (Temporary Measures) (Promotion of Banking Transactions) Regulations which were promulgated apparently to deal with an emergency that has since been dealt with.

“The bulk of the Act makes provision for bank use promotion overshadowing the provisions of the suppression of money laundering. It can be criticised as being emphatic on less vital aspects,” said Webster Madera a consultant with Transparency International Zimbabwe (TIZ) at a meeting held by the Friedrich Ebert Foundation.

He said money laundering was not clearly defined in the Act.

“There is a mere reference to the Serious Offences (Confiscation of Profits) Act where the term is defined although Sections 3 and 5 of the Act provide for the appointment of the director and inspectors of the Bank Use Promotion and Suppression of Money laundering.”

Madera said the nomination process of the inspectors who may come from any three institutions, the Reserve Bank of Zimbabwe (RBZ), Ministry of Finance and Economic Development and the Zimbabwe Revenue Authority (Zimra) was complicated and likely to cause confusion and conflict of interest.

The Act was further criticised for lacking extensive investigative and arresting powers of the inspectors.

The Act created a financial intelligence unit in the form of the Bank Use Promotion and Suppression of Money Laundering Unit.

The legislation creates an opportunity for the unit to acquire the relevant level of specialisation as regards detection and investigating money-laundering cases.

However, the Act has contributed much towards effective regulation of financial crimes and corruption in the financial sector.

The Act was gazetted on February 17. There had not been a piece of law to deal with the issue of money laundering explicitly before that.

The objectives of the enactment of the legislation is to promote use of the banking system, regulate possible abuse of the banking system by using it as an organ for laundering illicit profits and to make provision for the identification, tracing, seizure and confiscation of tainted property.

The Act appears to have been made in a bid to solve the financial crisis caused by the shortage of bank notes on the market in 2003.

It is divided into six parts that include the seizure of cash unlawfully held, bank use promotion and suppression of money laundering.

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