Zimbabwe: Proposed Additional Money‐Laundering Legislation
| Pages | 380-382 |
| Date | 01 February 1998 |
| DOI | https://doi.org/10.1108/eb027164 |
| Published date | 01 February 1998 |
| Author | Anthony R. Gubbay |
| Subject Matter | Accounting & finance |
Zimbabwe
Zimbabwe: Proposed Additional Money-
Laundering Legislation
Anthony R. Gubbay
Zimbabwe already has in place the Serious Offen-
ces (Confiscation of Profits) Act [Ch. 9: 17]. It
was enacted in 1990 in response to a Common-
wealth initiative which encouraged all Common-
wealth members to enact legislation to control
money laundering.
The Law Development Commission of Zim-
babwe has recently recommended additional
supplementary legislation.1
DESIGNATED INSTITUTIONS
The first proposal is that certain institutions should
be designated as being subject to the proposed law.
The Zimbabwe Law Development Commission
observed that the range of institutions that could
be involved in money laundering is unlimited. It
stretches from large financial institutions like
banks and building societies, whose prime business
is the deposit and refund of monies, to small insti-
tutions like firms of legal practitioners or estate
agents whose prime business is otherwise. Each are
targets for money laundering.
Accordingly the Commission recommends that
while the proposed new law should, at the outset,
contain a Schedule of designated institutions
which will be subject to the law, the Schedule
should be easily amendable by the Minister
responsible for the Act so that other classes of
institutions may be added from time to time as the
need or desirability occurs.
The Commission deals in its report with the
fears that some institutions have expressed about
the proposed requirement to make reports to a
proposed Central Agency,2 namely that this would
amount to, or at least be seen as, a breach of
confidentiality owed to their clients. The Commis-
sion points out, however, that confidentiality will
be maintained as the Central Agency will not be
permitted to disclose any information included in
any reports it receives or the sources thereof except
for the purposes of enforcing the law, that is for
suppressing money laundering or in terms of a
court order. In addition it will be expressly pro-
vided in the proposed law that no action or claim
will lie based on breach of confidentiality in so far
as complying with the law is concerned.
Finally it will be specifically provided that the
Act will not derogate from the common law legal
practitioners privilege which applies to communi-
cations between legal practitioner and client.
Record of identity of clients
The Commission next proposes that all designated
institutions must obtain proof of the identity of
clients. This will help in picking up the trail of
money laundering where it docs occur. The Com-
mission notes that it has been advised that client
identification is a most important factor in combat-
ing money laundering.
Record of transactions
The next proposal by the Commission is that
designated institutions must keep records of cer-
tain transactions which relate to relevant business.
A Schedule to the proposed Act will set out what
is 'relevant business'. It will include deposit taking;
lending monies; finance leasing; money transmis-
sion services; providing guarantees; investment
business (including dealing in futures relating to
securities, options, units, stocks and shares); life
insurance business and money changing.
Like the Schedule listing designated institutions,
this Schedule will also be subject to easy alteration
as the need arises.
Reporting of transactions
The Commission identifies three types of trans-
actions conducted in the course of relevant busi-
ness,
which must be reported to the Central
Agency by the designated institutions within pre-
scribed periods:
—
Threshold
transactions,
those which exceed a pre-
scribed amount.
—
Suspicious
transactions,
those to which a suspicion
of money laundering attaches.
Page 380
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