FIU Fines 300 Firms Over Parallel Market Activities

The  Reserve Bank of Zimbabwe’s Financial Intelligence Unit (FIU) says it has fined over 300 firms in the past 18 months for fuelling illegal foreign currency activities on the parallel market.

FIU director general Oliver Chiperesa told Business Times that some firms “dump” their proceeds onto the parallel market in search of scarce US dollars, thereby destabilising the local currency and fanning inflation. He said:

We have fined over 300 companies in the past 18 months over their participation in the illegal trading of foreign currency on the parallel market thereby influencing the exchange rate.

Since 2021 we have taken this administrative action against these companies to instill discipline.

Early last year, FIU froze the bank accounts of several companies including Transervet, Powerspeed trading as Electrosales, Halstead Brothers, and Enbee. Said Chiperesa:

As FIU we check the anomalies in the banking sector, that is where we monitor how the money was moved, what where you buying, whether is it a normal operating company, and does it have the services you require, if we see that there is no linkage and there is no normal business relationship with the two companies we pick it.

After that, we dig deep and analyse the findings as well as engage the parties, resultantly many have confessed to taking part in the parallel market.

If we are tough with every business that we find guilty, the economy will ground to a halt. That’s why we try to strike a balance.

The main reason why we try to deal with the issues at FIU level is that our criminal laws are a bit weak on that side as most issues we have referred to the police were not effectively dealt with.

Chiperesa said FIU now has the power to freeze accounts for 90 days from the previous 14 days to give the police the time to investigate.

The penalties stretch to over ZWL$1 million per violation but sometimes the violations could be bigger and attract bigger penalties.

More: Pindula News