Illegal currency dealers face arrest

Illegal currency dealers face arrest
Published: 29 September 2017
Government on Thursday gazetted a regulations to provide for the arrest and prosecution of illegal currency dealers who sell cash at a premium. Previeosuly, the Banking Act only allowed the Reserve Bank of Zimbabwe (RBZ) to impose penalties on offenders.

Zimbabwe is battling to contain a cash crisis, caused by externalisation and hording among other things, at a time inflows of hard currency have not kept pace with demand. Dealers have seized the opportunity to sell US dollar cash at premiums of up to 30 percent  and rates when transferring from bank or mobile accounts.

On a cash to cash exchange basis, $100 for example, will earn the seller $108 in bond notes despite the fact that the US dollar and bond officially rank equal.

Bond notes were introduced last year, to alleviate the cash shortages.

Giving a ministerial statement in the National Assembly, Finance and Economic Development Minister Patrick Chinamasa said the sale of cash on the streets was illegal and had reduced the circulation of money.

"In order to deal with the scourge of people buying and selling cash on the streets, government has today (Thursday) gazetted Exchange Control  Amendment regulations enacted by His Excellency the President in terms  of section 2 of the Exchange Control Act.

"These regulations, Mr Speaker Sir, will empower the police to arrest anyone trading in currency without a licence as such is an offence," he  said.

"Further it allows the police to seize the cash found on the possessor  of the currency suspected to be dealing in currencies. This seized  currency will be deposited with the Central Bank, pending prosecution so  that the cash will be used as exhibits."

Chinamasa said the new regulations also imposed several other penalties  including the freezing of funds, if the illegal deals are conducted  through a bank account, while the courts could impose a fine of three  times the value of the currency confiscated. A prison sentence not exceeding 10 years could also be imposed on  offenders.

Citing a case of a Stanbic Bank employee, Tariro Nyazema, who was  caught with $30 000 suspected of being money used in illegal cash  dealings, Chinamasa said the RBZ would closely monitor all banks.

"It is therefore our suspicion that this malpractice will be what is happening at other banks, working in cahoots with unscrupulous traders  and retailers," he said.

"It is for this reason that the RBZ is investigating all banks to root  out this problem."

- New Ziana
Tags: Currency,

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