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RBZ's FIU goes after car dealerships
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The Reserve Bank of Zimbabwe's (RBZ) Financial Intelligence Unit (FIU) has singled out the country's car dealership industry as the most vulnerable sector to money laundering, warning that its cash-heavy operations are creating fertile ground for illicit financial flows.
FIU Director General, Oliver Chiperesa, said the findings emerged from the recently completed third National Risk Assessment (NRA), which covered the period from November 2023 to November 2024. He noted that while Zimbabwe's overall money laundering risk was rated medium, car dealerships ranked highest across all risk metrics.
"The National Risk Assessment is a vital instrument in identifying, assessing, prioritising and understanding risks associated with money laundering, which emanate from both within and beyond our borders," Chiperesa said.
The NRA revealed that 95 percent of sampled car dealers operate on a purely cash basis, trading exclusively in United States dollars, with the majority importing vehicles for resale. The FIU warned that this model, combined with the lack of licensing and regulatory oversight in the sector, makes it a prime channel for laundering proceeds from smuggling, corruption, and tax evasion.
Zimbabwe's vehicle population grew by 25 percent between 2019 and 2023 — rising from just over 1.23 million to nearly 1.6 million. Investigators described this growth as creating a "cash bazaar" that criminals are exploiting to move illicit funds.
"Car dealers remain unregulated. The cash-intensive nature of their transactions makes it difficult to trace the source of funds," the report cautions.
Out of the 14 sectors examined by the RBZ, car dealerships were the only industry classified as high risk across all three metrics — threat, vulnerability, and money laundering risk. Real estate agents and dealers in precious metals and stones followed, both rated medium-high risk across the same measures.
The FIU, which also chairs the National Task Force on Anti-Money Laundering, Combating the Financing of Terrorism, and Countering Proliferation Financing, said the assessment would inform stricter surveillance and targeted regulatory reforms.
FIU Director General, Oliver Chiperesa, said the findings emerged from the recently completed third National Risk Assessment (NRA), which covered the period from November 2023 to November 2024. He noted that while Zimbabwe's overall money laundering risk was rated medium, car dealerships ranked highest across all risk metrics.
"The National Risk Assessment is a vital instrument in identifying, assessing, prioritising and understanding risks associated with money laundering, which emanate from both within and beyond our borders," Chiperesa said.
The NRA revealed that 95 percent of sampled car dealers operate on a purely cash basis, trading exclusively in United States dollars, with the majority importing vehicles for resale. The FIU warned that this model, combined with the lack of licensing and regulatory oversight in the sector, makes it a prime channel for laundering proceeds from smuggling, corruption, and tax evasion.
"Car dealers remain unregulated. The cash-intensive nature of their transactions makes it difficult to trace the source of funds," the report cautions.
Out of the 14 sectors examined by the RBZ, car dealerships were the only industry classified as high risk across all three metrics — threat, vulnerability, and money laundering risk. Real estate agents and dealers in precious metals and stones followed, both rated medium-high risk across the same measures.
The FIU, which also chairs the National Task Force on Anti-Money Laundering, Combating the Financing of Terrorism, and Countering Proliferation Financing, said the assessment would inform stricter surveillance and targeted regulatory reforms.
Source - The Chronicle
