Mangudya warns money launderers

THE governor of the Reserve Bank of Zimbabwe (RBZ), John Mangudya, says authorities will step up the current crack down on individuals and companies that are moving large but unexplained sums of money, "until there is sanity in the economy".

Speaking at the Daily News's 2021 national budget breakfast meeting in Harare on Monday, the central bank chief also said that it was important for companies to know their customers to avoid being entangled in money laundering cases.

"I was asking some firms in this economy about why they were accepting third party transactions? "You find a company called Alpha Asset Management, for example, buying cooking oil  from Surface Investments and you ask yourself what that company wants to do with cooking oil when it does not deal with that product?

"Surface might want to see that as a sale, but to us, it is money laundering. It means the chief executive officer of the company is not considering who his customer is and where the money is coming from, maybe because there are some shenanigans behind it.

"So, these are things we do every day. You need to know who your customer is for the sake of your business's integrity," Mangudya said.

"These are the things we need to sort out as a country. These are the things we are dealing with every day and we end up freezing their accounts, but I hate doing that.

"However, if you misbehave, I have no qualms about taking this action because it is against our own principles of doing business.

"A chief executive officer's job is to ask about compliance first and foremost," Mangudya added. The RBZ chief also called on companies to correct their deficiencies to avoid coming under scrutiny for their failure to adhere to Financial Action Task Force (FATF) rules.

"The deficiencies that led to our grey-listing are not insurmountable. They are about Zimbabweans understanding the rules on anti-money laundering and counter-financing of terrorism, which has been deemed to be very low.  "If your understanding of FATF is not very good, it means you do not understand the KYC (Know Your Customer) principle. People think that it is all about banks, yet it is also about you selling your fuel or cooking oil to third parties.

"Such things are critical, and that is one area where we have a deficiency. So, we need to ensure that when we talk about grey lists we can improve by doing what I am saying," Mangudya further told the well attended meeting.

FATF is an independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering, terrorism financing and the financing of weapons of mass destruction.

On the other hand, a grey list is a catalogue of stocks in which a bank is not allowed to invest in. This comes after six Zimbabweans and their companies were recently arraigned in court on money laundering allegations involving $5 billion.

Another businessman, Fidelis Chuma, has also appeared in court facing a money laundering charge involving $300 million. It also comes as the central bank has imposed strict regulations on mobile money transfer platforms by banning bulk agent lines and limiting the daily transaction limit to $5 000.

As a result of these measures, the Zimbabwe dollar has firmed up against the US dollar on both the black market and the official foreign currency auction system - bringing price stability in the economy.