CONFRONTING THE PROCEEDS OF CRIME IN SOUTHERN AFRICA: An Introspection

This report chapter examines money laundering in Zimbabwe from 2004 to 2006, analyzing the impact of hyperinflation, the role of financial institutions in laundering schemes, and the adequacy of the country's legal and regulatory frameworks. It highlights a gap between the establishment of anti-money laundering (AML) infrastructure and the actual prosecution of offenders.

• Hyperinflation and the introduction of bearer cheques between 2003 and 2006 created a fertile environment for money laundering and illegal speculative conduct. The lack of security features on bearer cheques led to the use of counterfeit substitutes, and the economic chaos encouraged corporations and individuals to use illegal foreign exchange markets, often falsifying records to hide audit trails.
• Financial institutions in Zimbabwe were central to money laundering activities during the review period, falling into three categories: those corrupt from inception (such as ENG Capital Asset Management), those infiltrated by rogue employees (such as First Mutual), and those that unwittingly facilitated laundering (such as National Discount House).
• The Bank Use Promotion and Suppression of Money Laundering Act (Act 2 of 2004) is the most comprehensive AML legislation in Zimbabwe. It defines money laundering, establishes the Financial Intelligence Inspectorate and Evaluation Unit (FIIE Unit), and mandates 'know your customer' (KYC) principles for designated institutions, including financial institutions, legal practitioners, and estate agents.
• Despite the existence of a legal framework, there were no money laundering prosecutions during the period. This is attributed to the fact that many crimes occurred before comprehensive legislation was enacted, a lack of familiarity among law enforcement agencies, and a preference for prosecuting predicate offences rather than money laundering itself.
• International cooperation to combat money laundering in Zimbabwe is described as weak. The report notes a specific failure to obtain mutual assistance from South Africa to bring suspects back to Zimbabwe for trial, despite the country having ratified several UN and SADC conventions.
• Certain government policies intended to attract foreign capital have inadvertently facilitated money laundering. For example, the Homelink system allowed funds to enter the country without questions regarding their source, and immigration regulations granted residency permits based on the possession of large sums of foreign currency.

APA

Fundira, B. (2007). CONFRONTING THE PROCEEDS OF CRIME IN SOUTHERN AFRICA: An Introspection. Institute for Security Studies. https://issafrica.org/topics/organised-crime/01-may-2007-monograph-no-132-confronting-the-proceeds-of-crime-in-southern-africa-an-introspection-edited-by-charles-goredema/chapter-3-money-laundering-in-zimbabwe-2004-to-2006

Chicago

Fundira, Bothwell. CONFRONTING THE PROCEEDS OF CRIME IN SOUTHERN AFRICA: An Introspection. Institute for Security Studies, 2007. https://issafrica.org/topics/organised-crime/01-may-2007-monograph-no-132-confronting-the-proceeds-of-crime-in-southern-africa-an-introspection-edited-by-charles-goredema/chapter-3-money-laundering-in-zimbabwe-2004-to-2006.

Wikipedia

{{cite report |last1=Fundira |first1=Bothwell |title=CONFRONTING THE PROCEEDS OF CRIME IN SOUTHERN AFRICA: An Introspection |publisher=Institute for Security Studies |date=May 2007 |url=https://issafrica.org/topics/organised-crime/01-may-2007-monograph-no-132-confronting-the-proceeds-of-crime-in-southern-africa-an-introspection-edited-by-charles-goredema/chapter-3-money-laundering-in-zimbabwe-2004-to-2006 |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fundira2007confronting, author = {Fundira, Bothwell}, title = {{CONFRONTING THE PROCEEDS OF CRIME IN SOUTHERN AFRICA: An Introspection}}, institution = {Institute for Security Studies}, year = {2007}, month = may, url = {https://issafrica.org/topics/organised-crime/01-may-2007-monograph-no-132-confronting-the-proceeds-of-crime-in-southern-africa-an-introspection-edited-by-charles-goredema/chapter-3-money-laundering-in-zimbabwe-2004-to-2006}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }