News / National
'Forex use not banned or criminalised'
06 Jul 2019 at 10:08hrs | Views
LEGAL think-tank Veritas says the use of foreign currency has not been banned or criminalised through Statutory Instrument 142 of 2009, which introduced the return of the Zimbabwean dollar and its use as the sole legal tender in the country.
In their latest Bill Watch online bulletin, Veritas said the Reserve Bank of Zimbabwe (RBZ) Act, under which SI 142 of 2019 was made, does not provide criminal offences for transacting in foreign currency.
"There is no provision in SI 142 of 2019 stating that the use of a foreign currency rather than Zimbabwe dollars is a criminal offence," Veritas said.
"There could not be any such provision because sections 44A and 64 of the Reserve Bank of Zimbabwe, under which the SI was made, do not allow the Finance minister to create criminal offences — or, to put it more precisely, the sections do not provide expressly for criminal offences and, in the absence of such a provision, the minister cannot create them," they said.
It said in Zimbabwe, there is no other law that creates offences for transacting in foreign currency.
"If SI 142 of 2019 does not criminalise the use of foreign currency, is there any other law that does? No, there isn't."
Veritas said even the Bank Use Promotion Act also does not deal with foreign currency, but it only prohibits traders and other business people from hoarding or trading in cash and provides for the confiscation of cash illegally held.
"Cash, however, is defined in the Act as meaning bank notes and coins of any currency that is … designated as legal tender in Zimbabwe".
If Zimdollars are, as the government claims, the sole legal tender in this country, then bond notes and coins are the only "cash" to which the Bank Use Promotion Act can apply, they said.
Already, two cases have been filed in the High Court challenging SI 142 of 2019 on the grounds that it is ultra vires the Reserve Bank of Zimbabwe Act, under which it was purportedly made. Veritas said there was substance in the High Court challenges.
Veritas said Finance minister Mthuli Ncube has no power to repeal the multi-currency system introduced though section 44A of the Reserve Bank of Zimbabwe Act.
"Under our law, ministers cannot make regulations amending or repealing Acts of Parliament and it is arguable by enacting SI 142, the minister has repealed the Finance Act's declaration of foreign currencies as legal tender — which he cannot do," Veritas said.
The legal think-tank said what Ncube and RBZ governor John Mangudya must now do is to work out which laws need to be enacted, repealed or amended to achieve their new policy goals, get them drafted to give effect to the new policies, while observing the rule of law, and approach Parliament to enact the new laws.
When Ncube appeared before the Budget and Finance Parliamentary Portfolio Committee this week to speak on SI 142 of 2019, he said he introduced the Zimdollar because the United States dollar made Zimbabwean wages expensive, among other reasons.
In their latest Bill Watch online bulletin, Veritas said the Reserve Bank of Zimbabwe (RBZ) Act, under which SI 142 of 2019 was made, does not provide criminal offences for transacting in foreign currency.
"There is no provision in SI 142 of 2019 stating that the use of a foreign currency rather than Zimbabwe dollars is a criminal offence," Veritas said.
"There could not be any such provision because sections 44A and 64 of the Reserve Bank of Zimbabwe, under which the SI was made, do not allow the Finance minister to create criminal offences — or, to put it more precisely, the sections do not provide expressly for criminal offences and, in the absence of such a provision, the minister cannot create them," they said.
It said in Zimbabwe, there is no other law that creates offences for transacting in foreign currency.
"If SI 142 of 2019 does not criminalise the use of foreign currency, is there any other law that does? No, there isn't."
Veritas said even the Bank Use Promotion Act also does not deal with foreign currency, but it only prohibits traders and other business people from hoarding or trading in cash and provides for the confiscation of cash illegally held.
"Cash, however, is defined in the Act as meaning bank notes and coins of any currency that is … designated as legal tender in Zimbabwe".
If Zimdollars are, as the government claims, the sole legal tender in this country, then bond notes and coins are the only "cash" to which the Bank Use Promotion Act can apply, they said.
Already, two cases have been filed in the High Court challenging SI 142 of 2019 on the grounds that it is ultra vires the Reserve Bank of Zimbabwe Act, under which it was purportedly made. Veritas said there was substance in the High Court challenges.
Veritas said Finance minister Mthuli Ncube has no power to repeal the multi-currency system introduced though section 44A of the Reserve Bank of Zimbabwe Act.
"Under our law, ministers cannot make regulations amending or repealing Acts of Parliament and it is arguable by enacting SI 142, the minister has repealed the Finance Act's declaration of foreign currencies as legal tender — which he cannot do," Veritas said.
The legal think-tank said what Ncube and RBZ governor John Mangudya must now do is to work out which laws need to be enacted, repealed or amended to achieve their new policy goals, get them drafted to give effect to the new policies, while observing the rule of law, and approach Parliament to enact the new laws.
When Ncube appeared before the Budget and Finance Parliamentary Portfolio Committee this week to speak on SI 142 of 2019, he said he introduced the Zimdollar because the United States dollar made Zimbabwean wages expensive, among other reasons.
Source - newsday
