Government in Efforts to Curb Illegal Forex Dealings

Finance and Economic Development Minister : Mthuli Ncube

By Lerato Ndlovu

Government has published a public advisory note on measures being instituted to curb illegal foreign currency dealings and parallel market price bench marking through the ministry of Finance and Economic Development.

Minister of Finance and Economic Development, Honourable Professor Mthuli Ncube blamed illegal foreign market dealings as a significant cause of price instability.

“Over the past 36 months, the government has instituted numerous initiatives to bring macro-economic stability. The resurge of these practices has been identified as a significant contributor to price instability in the economy and are imposing significant downside risks to macro-economic stability and the erosion of domestic and international competitiveness is therefore a cause for serious concern.

“The existence of the parallel market has provided an opportunity for price benchmarking at parallel market rates withstanding the fact that some of the businesses are accessing their full requirements for foreign exchange via the official channels, these practices were the intended targets of SI12,” he said.

He stated that the central bank working closely with the FIU have began a process of identifying and prosecuting perpetrators of parallel market activities through the following initiatives:

“ZIMRA will carry out impromptu audits of corporate activities with a view of quantifying potential tax liabilities arising out of illegal foreign currency trading; They will also carry out compliance audits with respect to compliance with the location tax introduced during the 2021 fiscal year.

“The FIU will continue to closely monitor and analyse financial transactions to identity, expose and take action against perpetrators of money laundering and other financial crime; The capacity of the FIU and other law enforcement agencies to investigate and prosecute violations of the Bank Use Prompt Act as well as various AMLCFT laws will be enhanced.

“Regulatory bodies including the Public Accountants and Auditors Board, will also be working on a framework to impose appropriate financial and professional sanctions on members of the accounting auditing and other professions who may be complicit in superintending over illicit affairs by corporate entities which they are charged with running.

“Businesses who disregard the law and continue to price their goods on the parallel market rates will have their licenses suspended,” Prof Mthuli said.

“ Members of the public are also encouraged to report to the FIU and National Economic Conduct Inspectorate all business entities directly or indirectly benchmarking prices at parallel market exchange rates”.

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