Blitz on Illegal Forex Dealers Nets 224, 90 Bank Accounts Frozen
In a concerted effort to curb illegal money changing activities, the Zimbabwean police have arrested 224 individuals involved in illegal forex trading.
This operation, conducted in collaboration with the Reserve Bank of Zimbabwe’s Financial Intelligence Unit (FIU), has also resulted in the freezing of 90 bank accounts linked to these illicit activities.
The crackdown on illegal money changers comes in the wake of the introduction of the Zimbabwe Gold (ZiG) currency early last month. These illegal money changers have long been a problem on the streets of Zimbabwe, flouting laws such as Section 14(1) of the Bank Use Promotion and Suppression of Money Laundering Act and the Exchange Control Act, which prohibit unauthorized dealings in foreign currency.
Assistant Commissioner Paul Nyathi, the national police spokesperson, confirmed the arrests and emphasized that those apprehended will face prosecution.
“A total of 224 forex dealers have been arrested around the country, and those who were caught will be prosecuted. We will not give a specific timeframe for when this operation will end, the exercise is ongoing to bring sanity into the economy.”He stated,
The illicit financial activities of these money changers have been accused of sabotaging Zimbabwe’s economy and undermining its recovery efforts. To address this issue, the FIU has not only frozen bank accounts but has also imposed fines on more than 40 individuals found to be in violation of the Exchange Control Act.
Mr. Oliver Chiperesa, the Director General of the FIU, explained that their role is to investigate the financial transactions of the arrested individuals and freeze their associated bank accounts.
“Many money changers have been arrested with several bank cards, mostly belonging to third parties. The FIU has frozen dozens of accounts linked to such cards and is analysing the transactions.
“The FIU also works with banks to analyse transactions across all banking services daily
to identify red flags and patterns of illegal dealing in the parallel market, among other financial transgressions,” he said.
In addition to cracking down on illegal money changers, the operation is also targeting traders who refuse to accept the ZiG currency or who accept it at parallel market rates. The authorities are determined to enforce the use of the ZiG currency as part of their efforts to stabilize the economy.
As a result of the ongoing operation, the number of illegal money changers operating in the Central Business District (CBD) and surrounding areas has significantly decreased. However, it appears that these individuals are finding new ways to continue their activities discreetly.
The introduction of the ZiG currency, as announced by RBZ Governor Dr. John Mushayavanhu in his Monetary Policy Statement on April 5, was intended to combat the black market and strengthen the local currency against the US dollar.
Finance, Economic Development, and Investment Promotion Minister Professor Mthuli Ncube reaffirmed the government’s commitment to tackling those undermining the new currency. He called for heavy fines to be imposed on individuals engaged in parallel market trading.
