Online Reporter
Nqobile Bhebhe
Zimpapers Business Hub
THE Reserve Bank of Zimbabwe (RBZ) has issued a stern warning to banking institutions, authorised dealers with limited authority (ADLAs), corporates and individuals engaged in foreign exchange trading, stressing that acts of non-compliance with trade and investment regulations will not be tolerated.
The central bank has introduced tougher penalties, including hefty fines and the possible suspension of trading licences, to safeguard the integrity of the country’s financial system.
According to the latest Mid-Term Monetary Policy review statement presented by Reserve Bank of Zimbabwe Governor, Dr John Mushayavanhu, the RBZ said in a statement it has “observed recurring incidences of non-compliance with exchange control rules and regulations across the economy.
“These incidents, which contravene the established regulatory framework, undermine the conduct of trade and investment transactions and compromise the integrity of the financial sector,” he said.
According to the central bank, the most prevalent violations include failure to acquit export and import documentation within prescribed timelines, non-application of liquidation requirements on export receipts, falsification of documents to facilitate irregular exports and imports, non-registration of external loans and service agreements and establishment of cross-border investments without prior RBZ authorisation.
Added to that, transgressions have included under-declaration of exports and over-pricing of imports, failure to report or submit statutory returns on approved trade and investment transactions, masking of borrowed funds through multiple bank transfers, leading to abuse of the Willing-Buyer Willing-Seller (WBWS) foreign exchange interbank market.
Wrong classification and coding of trade and investment transactions, distorting official data and failure to conduct proper due diligence on supporting documents for WBWS foreign currency access, resulting in “double dipping” and unsupported payments, are also reportedly prevalent.
To enforce compliance, the RBZ has revised upwards the penalty fees for non-compliance to 1 percent of the transaction amount or US$100 000 (or ZiG equivalent), whichever is greater. In extreme cases, the RBZ will suspend or revoke the offender’s foreign exchange trading licence.
“To foster a culture of compliance and uphold the foreign exchange rules and regulations that govern trade and investment transactions, the Reserve Bank has revised the penalty fees for non-compliance upwards to one percent of the transaction amount or one hundred thousand United States dollars (US$100 000.00 or ZiG equivalent), whichever is greater or suspension or revocation of foreign exchange trading licence,” the bank said.
“Authorised dealers, authorised dealers with limited authority and corporates are, therefore, required to put in place adequate internal control systems to ensure compliance with foreign exchange rules and regulations. Acts of non-compliance will not be tolerated.”
The WBWS foreign exchange interbank market is the official platform where foreign currency is traded at rates determined by market forces of supply and demand.
Under this arrangement, buyers and sellers freely agree on an exchange rate, allowing for transparency and efficiency in forex allocation. The system is designed to promote a market-determined exchange rate while ensuring that all transactions are legitimate, properly documented, and in line with Zimbabwe’s Exchange Control regulations.
However, the RBZ warned that abuse of this market, through fraudulent documentation, “double dipping” to obtain forex from multiple sources, or channelling borrowed funds disguised as export proceeds, undermines its purpose and threatens currency stability.
With Zimbabwe’s economy heavily dependent on transparent trade flows and credible forex markets the crackdown is part of broader reforms to strengthen financial discipline, protect the economy from illicit transactions, and maintain investor confidence.
