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FATF Statement re AML Strategic Deficiencies:
Date: 16 February 2012
In June 2011, Zimbabwe made a high-level political commitment to
work with the FATF and ESAAMLG to address its strategic
AML/CFT deficiencies. The FATF has determined that strategic
AML/CFT deficiencies remain. Zimbabwe should continue to work
on implementing its action plan to address these deficiencies,
including by: (1) adequately criminalising money laundering and
terrorist financing (Recommendation I and Special
Recommendation II); (2) establishing and implementing adequate
procedures to identify and freeze terrorist assets (Special
Recommendation III); (3) ensuring a fully operational and
effectively functioning Financial Intelligence Unit
(Recommendation 26); (4) ensuring that financial institutions are
aware of and comply with their obligations to file suspicious
transaction reports in relation to money laundering and the
financing of terrorism (Recommendation 13 and Special
Recommendation IV); (5) enacting and implementing appropriate
mutual legal assistance legislation (Special Recommendation V);
and (6) implementing the 1999 International Convention for the
Suppression of Financing of Terrorism (Special Recommendation
I). The FATF encourages Zimbabwe to address its remaining
deficiencies and continue the process of implementing its action
plan.
____________________________________________________
Sanctions:
February 23, 2012 - EU Commission implements Regulation (EU)
No 151/2012 of 21 February 2012 amending Council Regulation
(EC) No 314/2004 concerning certain restrictive measures in
respect of Zimbabwe
Read Regulation
EU sanctions include a ban on technical assistance, financing and
financial assistance related to military activities, a ban on the
export of equipment which might be used for internal repression,
and the freezing of funds and economic resources of members of
the Government of Zimbabwe and of any natural or legal persons,
entities or bodies associated with them. The list of currently 168
names and 4 entities will be increased. The 10 names to be
added to the list will be "persons actively engaged in violence or
human rights infringements." Individuals on the list are also
banned from entering EU countries. The list may be viewed at:
http://www.hm-treasury.gov.uk/fin_sanctions_zimbabwe.htm
US sanctions include the list of individuals but also include
businesses which the Treasury Department said were used by Mr.
Mugabe and his “regime cronies” to “illegally siphon revenue and
foreign exchange from the Zimbabwean people.”
The companies include the Zimbabwe Mining Development
Corporation, which controls all mineral exports; the Zimbabwe Iron
and Steel Company, the country’s largest steel works; the
commercial arm of Zimbabwe’s army, known as Osleg, or
Operation Sovereign Legitimacy; and several of the country’s
largest banks.
The Treasury Department sanctions imposed include the freezing
of any assets the Zimbabwean firms may have in financial
institutions under U.S. jurisdiction. Additionally, U.S. citizens are
prohibited from conducting any business with them.
There are also restrictions against the offering of any credit
facilities to Zimbabwe by IMF, World Bank and Africa Development
Bank, among others.
Other countries, e.g. Australia have also imposed bilateral
sanctions on Zimbabwe, which tend to reflect EU sanctions.
For further information on US sanctions, please visit the following
link: -
http://www.treasury.gov/resource-
center/sanctions/Programs/pages/zimb.aspx
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2012:
Zimbabwe is not a regional financial center, but it faces problems
related to money laundering and official corruption. Regulation
and enforcement in the financial sector is weak, mainly due to a
lack of trained regulators and investigators and limited asset-
seizure authority. These deficiencies expose the country to
money-laundering abuses, but there are no data on the extent of
money laundering in Zimbabwe. The exposure is greatest within
the financial sector, which includes both formal and informal
institutions. Commercial banks, building societies, moneylenders,
insurance brokers, realtors, and lawyers in Zimbabwe are all
vulnerable to exploitation by money launderers. Financial crime
may also be magnified by opportunities to smuggle diamonds from
alluvial deposits in the Marange area of eastern Zimbabwe.
Nearly all transactions in Zimbabwe are now carried out with
either the U.S. dollar or the South African rand. The Government
of Zimbabwe’s (GOZ) switch to this “multi-currency regime”
dramatically reduced opportunities for money laundering and
financial crime arising from the multiple exchange rates and
opaque foreign-exchange controls that were in place until 2009.
Legislators from all parties in the coalition government have
increased scrutiny of government activities, and ministers from
former opposition parties have pushed for further reforms. For
example, the parliamentary committee on mining has held officials
to account for GOZ actions in the Marange diamond fields, and
the minister of finance has implemented a new law to improve
accountability at the Reserve Bank of Zimbabwe (RBZ).
The United States, Canada, Australia, and the European Union
have imposed targeted financial sanctions and travel restrictions
on political leaders and others believed to have been complicit in
human rights abuses.
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: No
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes
Legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: NO
Domestic: NO
KYC covered entities: Commercial banks, acceptance houses,
discount houses, money transfer agencies, bureaux de change,
legal practitioners, accounting firms, pension funds, real estate
agents, cash dealers, and finance houses
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: None in 2011
Number of CTRs received and time frame: Not applicable
STR covered entities: Commercial banks, acceptance houses,
discount houses, money transfer agencies, bureaux de change,
legal practitioners, accounting firms, pension funds, real estate
agents, cash dealers, and finance houses
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: None in 2011
Convictions: None in 2011
Records exchange mechanism:
With U.S.: MLAT: NO Other Mechanism: NO
With other governments/jurisdiction: YES
Zimbabwe is a member of the Eastern and Southern Africa Anti-
Money Laundering Group (ESAAMLG), a Financial Action Task
Force (FATF)-style regional body. Its most recent mutual
evaluation can be found here: http://www.esaamlg.
org/userfiles/Zimbabwe_detailed_report.pdf
Enforcement and implementation issues and comments:
Zimbabwe has developed an action plan to address its strategic
AML/CFT deficiencies. Zimbabwe needs to adequately criminalize
money laundering and terrorist financing; establish and implement
adequate procedures to identify and freeze terrorist assets;
ensure a fully operational and effectively functioning financial
intelligence unit; and ensure financial institutions are aware of and
comply with their obligations to file suspicious transaction reports.
Law enforcement and regulatory agencies lack the resources to
combat money laundering vigorously. Anti-money laundering
(AML) legislation is sometimes abused for political purposes. More
broadly, corruption sometimes impedes application of Zimbabwe’s
AML mechanisms. Zimbabwe has criminalized money laundering
and put in place mechanisms for freezing and forfeiting assets;
however, deficiencies remain in being able to do so in a timely
manner. The banking system can quickly freeze accounts, but
financial institutions typically receive information related to
designations from private sources and not government agencies.
Zimbabwe has broad legislation on mutual legal assistance in
both civil and criminal cases. In general, there are no legal or
practical impediments to rendering assistance, providing both
Zimbabwe and the requesting country criminalize the conduct
underlying the offense.
The GOZ should become a party to the International Convention
for the Suppression of the Financing of Terrorism.
____________________________________________________
US State Dept Narcotics Report 2011 (introduction):
No report available
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 3)
Zimbabwe is a source, transit, and destination country for men,
women, and children subjected to forced labor and sex trafficking.
Women and girls from Zimbabwean towns bordering South Africa
and Zambia are subjected to sex trafficking in brothels that cater
to long-distance truck drivers. Recent reports indicate that young
women from rural areas are recruited into forced prostitution
through the guise of beauty pageants held in cities. Some victims
of forced prostitution are subsequently transported across the
border to South Africa where they suffer continued exploitation.
Zimbabwean men, women, and children are subjected to forced
labor in agriculture and domestic service in rural areas, as well as
domestic servitude and sex trafficking in cities and towns. Children
are also utilized in the commission of illegal activities, including
gambling and drug smuggling. Although security forces still
maintain control of Marange district, sources indicate that forced
labor abuses, including Zimbabwean security services forcing
young men and boys to mine for diamonds, have ended.
Zimbabwean men and boys migrate illegally to South Africa,
where some are forced to labor for months on farms, in mines, or
in construction without pay before their employers report them to
authorities for deportation. Many Zimbabwean women and some
children willingly migrate to South Africa, often with the assistance
of taxi drivers who transport them to the border at Beitbridge or
nearby; some of the migrants are given to thugs, who subject
them to violent attacks, rape, deception, and, in some cases, sex
trafficking in Musina, Pretoria, Johannesburg, or Durban.
Zimbabwean women and men are lured into exploitative labor
situations in Angola, the United Arab Emirates, Malaysia, Nigeria,
and South Africa with false offers of employment in agriculture,
construction, information technology, and hospitality, and some
subsequently become victims of forced labor. Young women and
girls are also lured to China, Egypt, the United Kingdom, and
Canada under false pretenses, and then subjected to prostitution.
Men, women, and children from Bangladesh, Somalia, India,
Pakistan, the Democratic Republic of the Congo, Malawi,
Mozambique, and Zambia are trafficked through Zimbabwe en
route to South Africa. Women and children from border
communities in neighboring countries are trafficked to Zimbabwe
for forced labor and prostitution. A small number of South African
girls are exploited in Zimbabwe in domestic servitude.
The Government of Zimbabwe does not fully comply with the
minimum standards for the elimination of trafficking and is not
making significant efforts to do so. While high-level officials
showed an increased interest in trafficking issues, others denied
the existence of a trafficking problem in Zimbabwe. The
government did not report investigations, prosecutions, or
convictions of trafficking cases. The government continued to rely
on an international organization to provide law enforcement
training, coordinate victim care and repatriation, and lead
prevention efforts. During the year, draft anti-trafficking legislation
was finalized and introduced to the Council of Ministers for
debate; at the time of this report, the draft legislation had not yet
reached Parliament for consideration. Reports indicate that the
exploitation of children and adults in forced labor in the Marange
diamond fields has ceased.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2009
Zimbabwean government agencies routinely provided assistance
by conducting investigative inquiries, traces, and border checks of
individuals thought to be threats to U.S. government facilities or
personnel. Zimbabwe’s continued economic decline, however, has
had a detrimental impact on local law enforcement and national
security elements responsible for implementing and coordinating
counterterrorism efforts. The Suppression of Foreign and
International Terrorism Bill, enacted in August 2007 to combat
terrorism and mercenary activities in Zimbabwe, was redirected to
suppress opponents of Zimbabwe’s political leaders and policies.
Although generally cooperative, Zimbabwean law enforcement
officials have been reluctant to take or recommend actions that
would be seen as pro-American. This has undermined efforts to
foster greater cooperation.
____________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
Date: 16 February 2012
In June 2011, Zimbabwe made a high-level political commitment to
work with the FATF and ESAAMLG to address its strategic
AML/CFT deficiencies. The FATF has determined that strategic
AML/CFT deficiencies remain. Zimbabwe should continue to work
on implementing its action plan to address these deficiencies,
including by: (1) adequately criminalising money laundering and
terrorist financing (Recommendation I and Special
Recommendation II); (2) establishing and implementing adequate
procedures to identify and freeze terrorist assets (Special
Recommendation III); (3) ensuring a fully operational and
effectively functioning Financial Intelligence Unit
(Recommendation 26); (4) ensuring that financial institutions are
aware of and comply with their obligations to file suspicious
transaction reports in relation to money laundering and the
financing of terrorism (Recommendation 13 and Special
Recommendation IV); (5) enacting and implementing appropriate
mutual legal assistance legislation (Special Recommendation V);
and (6) implementing the 1999 International Convention for the
Suppression of Financing of Terrorism (Special Recommendation
I). The FATF encourages Zimbabwe to address its remaining
deficiencies and continue the process of implementing its action
plan.
____________________________________________________
Sanctions:
February 23, 2012 - EU Commission implements Regulation (EU)
No 151/2012 of 21 February 2012 amending Council Regulation
(EC) No 314/2004 concerning certain restrictive measures in
respect of Zimbabwe
Read Regulation
EU sanctions include a ban on technical assistance, financing and
financial assistance related to military activities, a ban on the
export of equipment which might be used for internal repression,
and the freezing of funds and economic resources of members of
the Government of Zimbabwe and of any natural or legal persons,
entities or bodies associated with them. The list of currently 168
names and 4 entities will be increased. The 10 names to be
added to the list will be "persons actively engaged in violence or
human rights infringements." Individuals on the list are also
banned from entering EU countries. The list may be viewed at:
http://www.hm-treasury.gov.uk/fin_sanctions_zimbabwe.htm
US sanctions include the list of individuals but also include
businesses which the Treasury Department said were used by Mr.
Mugabe and his “regime cronies” to “illegally siphon revenue and
foreign exchange from the Zimbabwean people.”
The companies include the Zimbabwe Mining Development
Corporation, which controls all mineral exports; the Zimbabwe Iron
and Steel Company, the country’s largest steel works; the
commercial arm of Zimbabwe’s army, known as Osleg, or
Operation Sovereign Legitimacy; and several of the country’s
largest banks.
The Treasury Department sanctions imposed include the freezing
of any assets the Zimbabwean firms may have in financial
institutions under U.S. jurisdiction. Additionally, U.S. citizens are
prohibited from conducting any business with them.
There are also restrictions against the offering of any credit
facilities to Zimbabwe by IMF, World Bank and Africa Development
Bank, among others.
Other countries, e.g. Australia have also imposed bilateral
sanctions on Zimbabwe, which tend to reflect EU sanctions.
For further information on US sanctions, please visit the following
link: -
http://www.treasury.gov/resource-
center/sanctions/Programs/pages/zimb.aspx
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2012:
Zimbabwe is not a regional financial center, but it faces problems
related to money laundering and official corruption. Regulation
and enforcement in the financial sector is weak, mainly due to a
lack of trained regulators and investigators and limited asset-
seizure authority. These deficiencies expose the country to
money-laundering abuses, but there are no data on the extent of
money laundering in Zimbabwe. The exposure is greatest within
the financial sector, which includes both formal and informal
institutions. Commercial banks, building societies, moneylenders,
insurance brokers, realtors, and lawyers in Zimbabwe are all
vulnerable to exploitation by money launderers. Financial crime
may also be magnified by opportunities to smuggle diamonds from
alluvial deposits in the Marange area of eastern Zimbabwe.
Nearly all transactions in Zimbabwe are now carried out with
either the U.S. dollar or the South African rand. The Government
of Zimbabwe’s (GOZ) switch to this “multi-currency regime”
dramatically reduced opportunities for money laundering and
financial crime arising from the multiple exchange rates and
opaque foreign-exchange controls that were in place until 2009.
Legislators from all parties in the coalition government have
increased scrutiny of government activities, and ministers from
former opposition parties have pushed for further reforms. For
example, the parliamentary committee on mining has held officials
to account for GOZ actions in the Marange diamond fields, and
the minister of finance has implemented a new law to improve
accountability at the Reserve Bank of Zimbabwe (RBZ).
The United States, Canada, Australia, and the European Union
have imposed targeted financial sanctions and travel restrictions
on political leaders and others believed to have been complicit in
human rights abuses.
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: No
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: All serious crimes
Legal persons covered: criminally: YES civilly: YES
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: NO
Domestic: NO
KYC covered entities: Commercial banks, acceptance houses,
discount houses, money transfer agencies, bureaux de change,
legal practitioners, accounting firms, pension funds, real estate
agents, cash dealers, and finance houses
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: None in 2011
Number of CTRs received and time frame: Not applicable
STR covered entities: Commercial banks, acceptance houses,
discount houses, money transfer agencies, bureaux de change,
legal practitioners, accounting firms, pension funds, real estate
agents, cash dealers, and finance houses
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: None in 2011
Convictions: None in 2011
Records exchange mechanism:
With U.S.: MLAT: NO Other Mechanism: NO
With other governments/jurisdiction: YES
Zimbabwe is a member of the Eastern and Southern Africa Anti-
Money Laundering Group (ESAAMLG), a Financial Action Task
Force (FATF)-style regional body. Its most recent mutual
evaluation can be found here: http://www.esaamlg.
org/userfiles/Zimbabwe_detailed_report.pdf
Enforcement and implementation issues and comments:
Zimbabwe has developed an action plan to address its strategic
AML/CFT deficiencies. Zimbabwe needs to adequately criminalize
money laundering and terrorist financing; establish and implement
adequate procedures to identify and freeze terrorist assets;
ensure a fully operational and effectively functioning financial
intelligence unit; and ensure financial institutions are aware of and
comply with their obligations to file suspicious transaction reports.
Law enforcement and regulatory agencies lack the resources to
combat money laundering vigorously. Anti-money laundering
(AML) legislation is sometimes abused for political purposes. More
broadly, corruption sometimes impedes application of Zimbabwe’s
AML mechanisms. Zimbabwe has criminalized money laundering
and put in place mechanisms for freezing and forfeiting assets;
however, deficiencies remain in being able to do so in a timely
manner. The banking system can quickly freeze accounts, but
financial institutions typically receive information related to
designations from private sources and not government agencies.
Zimbabwe has broad legislation on mutual legal assistance in
both civil and criminal cases. In general, there are no legal or
practical impediments to rendering assistance, providing both
Zimbabwe and the requesting country criminalize the conduct
underlying the offense.
The GOZ should become a party to the International Convention
for the Suppression of the Financing of Terrorism.
____________________________________________________
US State Dept Narcotics Report 2011 (introduction):
No report available
____________________________________________________
US State Dept Trafficking in Persons Report 2011
(introduction):
(Tier 3)
Zimbabwe is a source, transit, and destination country for men,
women, and children subjected to forced labor and sex trafficking.
Women and girls from Zimbabwean towns bordering South Africa
and Zambia are subjected to sex trafficking in brothels that cater
to long-distance truck drivers. Recent reports indicate that young
women from rural areas are recruited into forced prostitution
through the guise of beauty pageants held in cities. Some victims
of forced prostitution are subsequently transported across the
border to South Africa where they suffer continued exploitation.
Zimbabwean men, women, and children are subjected to forced
labor in agriculture and domestic service in rural areas, as well as
domestic servitude and sex trafficking in cities and towns. Children
are also utilized in the commission of illegal activities, including
gambling and drug smuggling. Although security forces still
maintain control of Marange district, sources indicate that forced
labor abuses, including Zimbabwean security services forcing
young men and boys to mine for diamonds, have ended.
Zimbabwean men and boys migrate illegally to South Africa,
where some are forced to labor for months on farms, in mines, or
in construction without pay before their employers report them to
authorities for deportation. Many Zimbabwean women and some
children willingly migrate to South Africa, often with the assistance
of taxi drivers who transport them to the border at Beitbridge or
nearby; some of the migrants are given to thugs, who subject
them to violent attacks, rape, deception, and, in some cases, sex
trafficking in Musina, Pretoria, Johannesburg, or Durban.
Zimbabwean women and men are lured into exploitative labor
situations in Angola, the United Arab Emirates, Malaysia, Nigeria,
and South Africa with false offers of employment in agriculture,
construction, information technology, and hospitality, and some
subsequently become victims of forced labor. Young women and
girls are also lured to China, Egypt, the United Kingdom, and
Canada under false pretenses, and then subjected to prostitution.
Men, women, and children from Bangladesh, Somalia, India,
Pakistan, the Democratic Republic of the Congo, Malawi,
Mozambique, and Zambia are trafficked through Zimbabwe en
route to South Africa. Women and children from border
communities in neighboring countries are trafficked to Zimbabwe
for forced labor and prostitution. A small number of South African
girls are exploited in Zimbabwe in domestic servitude.
The Government of Zimbabwe does not fully comply with the
minimum standards for the elimination of trafficking and is not
making significant efforts to do so. While high-level officials
showed an increased interest in trafficking issues, others denied
the existence of a trafficking problem in Zimbabwe. The
government did not report investigations, prosecutions, or
convictions of trafficking cases. The government continued to rely
on an international organization to provide law enforcement
training, coordinate victim care and repatriation, and lead
prevention efforts. During the year, draft anti-trafficking legislation
was finalized and introduced to the Council of Ministers for
debate; at the time of this report, the draft legislation had not yet
reached Parliament for consideration. Reports indicate that the
exploitation of children and adults in forced labor in the Marange
diamond fields has ceased.
For full report click here
____________________________________________________
US State Dept Terrorism Report 2009
Zimbabwean government agencies routinely provided assistance
by conducting investigative inquiries, traces, and border checks of
individuals thought to be threats to U.S. government facilities or
personnel. Zimbabwe’s continued economic decline, however, has
had a detrimental impact on local law enforcement and national
security elements responsible for implementing and coordinating
counterterrorism efforts. The Suppression of Foreign and
International Terrorism Bill, enacted in August 2007 to combat
terrorism and mercenary activities in Zimbabwe, was redirected to
suppress opponents of Zimbabwe’s political leaders and policies.
Although generally cooperative, Zimbabwean law enforcement
officials have been reluctant to take or recommend actions that
would be seen as pro-American. This has undermined efforts to
foster greater cooperation.
____________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
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*Please note that FATF deems that a country has significant aml deficiencies if
any of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated
either Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
any of the 'Core' Recommendations, R1, R5, R10, R13, SRII, or SRIV are rated
either Partially of Non-Compliant. These are marked in red.
For FATF to remove a country from the regular follow-up process, it has to be rated
Compliant or Largely Compliant in the above mentioned Core Recommendations
and the following Key Recommendations: -
R3, R4, R23, R26, R35, R36, R40, SRI, SRIII, SRV
Please also note that any risk assessment should take into consideration all
follow-up reports.
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| Last Updated: 16 April 2012 |