Money laundering web exposed in Zimbabwe

Zimbabwe's anti-graft watchdog, the Zimbabwe Anti-Corruption Commission (Zacc), handled nearly two dozen money laundering cases worth about US$30 million in 2022 before referring them for prosecution and asset recovery, according to the Financial Intelligence Unit's (FIU) 2024 national risk assessment.

The report highlights a sophisticated and evolving ecosystem of illicit financial flows, often involving companies, shell structures, and high-net-worth individuals. Despite some progress, investigators note persistent structural weaknesses, including limited data, opaque corporate ownership, and recurring schemes used to move funds abroad.

"In 2022, 20 cases worth US$29 million were referred by Zacc to the National Prosecuting Authority, resulting in asset seizures," the FIU said, noting that seven convictions were made for criminal abuse of office in legal structures.

Between 2021 and 2023, the FIU received 15,531 suspicious transaction reports from banks, insurers, mobile money operators, money transfer agencies, and securities firms. More than 310 cases were escalated for deeper investigation. Investigators discovered repeatable patterns of financial crime exploiting corporate structures, digital platforms, and cross-border trade.

A striking example involved a Zimbabwean travel company that transferred US$307,545 to South Africa under the pretext of importing prepaid electricity meters. The funds were instead diverted to purchase immovable property in Pretoria using fabricated invoices. The individual involved faced five counts of money laundering under the Money Laundering and Proceeds of Crime Act.

The FIU also noted that mobile money platforms have been exploited for illicit flows. Accounts created with unverified identities were used to convert fictitious mobile money into cash, purchase foreign currency on the parallel market, and acquire high-value assets abroad. Authorities responded by ordering nationwide re-registration of agents to curb abuse.

Corporate opacity, including shelf companies, foreign trusts, and complex ownership chains, remains a key enabler. The report highlighted a foreign company that submitted forged documents to secure investment approval, illustrating risks in due diligence systems.

Other reported illicit financial activities included illegal forex trading, tax evasion, bribery, procurement fraud, and mineral smuggling. In 2023, the FIU referred 106 cases to law enforcement, nearly half linked to exchange control violations and parallel market activity.

Experts warn that these flows cost Zimbabwe an estimated US$1–2 billion annually, with total proceeds of crime from 2019–2023 totaling US$6.15 billion — roughly 3.4% of GDP per year.

"The offences feeding these flows are diverse, yet the enabling mechanism is often the same — corporate opacity," analysts said. Weak screening, resource constraints, and cross-border transactions continue to hamper enforcement, while digital platforms present both opportunities and vulnerabilities.

The FIU stressed that tackling these weaknesses is critical for curbing capital flight, protecting domestic revenue, and stabilising Zimbabwe's economy. False invoicing and inflated import claims, coupled with misuse of digital finance, remain particularly effective tools for externalisation.