Zimbabwe adopts risk-based classification for PVOs

The Government has introduced a risk-based framework for the supervision of private voluntary organisations (PVOs), under which charities and non-governmental organisations will be classified according to their exposure to potential money laundering and terrorist financing risks.

The new system forms part of Zimbabwe's efforts to comply with international standards set by the Financial Action Task Force, the global body responsible for combating money laundering, terrorist financing and other threats to the international financial system.

Under the framework, PVOs will be categorised as high-risk, medium-risk or low-risk entities based on factors such as foreign funding sources, operational activities, geographical exposure and cross-border financial transactions.

The measures were announced by Edgar Moyo through a Statutory Instrument published in the Government Gazette last week.

The classification system is being implemented under the Private Voluntary Organisations (Risk-Based Supervision and Protection from Terrorist Financing Abuse) Regulations, 2026, which operationalise provisions of the Private Voluntary Organisations Act enacted in April 2025.

Government says the regulations are intended to strengthen accountability and transparency within the non-profit sector while ensuring compliance with FATF Recommendation 8, which focuses on protecting non-profit organisations from abuse by terrorist financiers.

"The purpose of these regulations is to implement a risk-based approach to the supervision of PVOs in accordance with FATF Recommendation 8, ensure that measures to prevent terrorist financing are proportionate to the risks identified and to protect the private voluntary sector from terrorist financing abuse without disrupting or discouraging legitimate charitable activities," the regulations state.

The new framework establishes closer collaboration between the Ministry of Public Service, Labour and Social Welfare and the Financial Intelligence Unit in identifying and assessing risks within the sector.

"In carrying out the risk assessment referred to in section 22(3) of the Act, the Minister, in cooperation with the FIU and relevant stakeholders, shall conduct a periodic sectoral risk assessment of the PVO sector to identify the subset of organisations that fall within the FATF definition of a non-profit organisation and are likely to be at risk of terrorist financing abuse," the regulations provide.

The assessments will examine both the threats posed by terrorist organisations and the vulnerabilities of individual PVOs.

Government will also be required to review the sectoral risk assessment at least once every five years or sooner if significant changes occur in the risk environment.

Under the classification framework, organisations deemed to have substantial exposure to foreign funding from high-risk jurisdictions or conflict-affected regions will be categorised as high-risk.

Medium-risk organisations will include those with moderate exposure to domestic and foreign funding streams and standard operational risks.

Low-risk entities will generally comprise community-based organisations operating exclusively within Zimbabwe, funded primarily through domestic sources and managing relatively small financial turnovers.

Officials say the risk-based approach will enable regulators to focus supervisory resources on organisations facing the highest levels of exposure while reducing unnecessary regulatory burdens on lower-risk entities.

The reforms form part of broader efforts to align Zimbabwe's regulatory framework with international anti-money laundering and counter-terrorism financing standards.

FATF requires countries to criminalise terrorist financing, assess and monitor terrorism-related risks, and establish effective safeguards across financial and non-financial sectors to prevent the misuse of institutions and organisations by criminal networks.

Government has argued that the PVO Act and accompanying regulations are necessary to protect the integrity of the charitable sector and improve transparency in the management of donor funds.

Authorities have also maintained that the legislation seeks to ensure organisations operate within their stated mandates and maintain proper governance and accountability standards.

The introduction of the risk-based classification system marks a significant shift in the regulation of Zimbabwe's non-profit sector and is expected to influence how charities, civic organisations and development agencies operate and report their activities in the coming years.

Stakeholders in the sector are now expected to familiarise themselves with the new requirements as Government moves to implement the framework and conduct the first round of sector-wide risk assessments.