US embassy cable - 05HARARE171

UNCLAS HARARE 000171 
 
SIPDIS 
 
DEPT FOR AF/S 
 
JUSTICE FOR OIA, AFMLS, NDDS 
TREASURY FOR FINCEN 
DEA FOR OILS AND OFFICE OF DIVERSION CONTROL 
 
E.O. 12958: N/A 
TAGS: EFIN, KCRM, KSEP, PTER, SNAR, ZI, Other Mandatory Reports 
SUBJECT: ZIMBABWE: 2005 INTERNATIONAL NARCOTICS CONTROL 
STRATEGY REPORT (INSCR), MONEY LAUNDERING AND FINANCIAL 
CRIMES 
 
REF: STATE: 254401 
 
 1.  Zimbabwe is not a regional financial center and is not 
considered to be at significant risk for money laundering. 
 
2.  Zimbabwe,s Anti-Money Laundering Act criminalizes 
narcotics-related money laundering.  The Government of 
Zimbabwe in 2004 passed the Anti-Money Laundering and 
Proceeds of Crime Act.  The Act applies to all forms of money 
laundering and would require banks to maintain records 
sufficient to reconstruct individual transactions for at 
least six years.  The Act also mandates a prison sentence of 
up to five years for a money laundering conviction.  The Act 
addresses terrorist financing and authorizes the tracking and 
seizing of assets.  In the context of the Government,s 
history of using the legal system selectively and 
aggressively to target political opponents, the new Act has 
raised human rights concerns although the Act to date has not 
been associated with due process abuses.  The Government so 
far has not acted under the new law substantially, and its 
implementation has not provoked meaningful public backlash. 
 
3.  Over the past year, the Government has arrested many 
prominent Zimbabweans for activities it calls &financial 
crimes.8  Most involve violations of currency restrictions 
that criminalize the &externalization of foreign exchange,8 
i.e., transferring assets offshore ) activities conducted by 
most Zimbabwean businesses with substantial imports or 
exports.  To date, the Anti-Money Laundering Act has not been 
employed in the selective prosecution of individuals for such 
"crimes." 
 
4.  When requested, the banking community generally has 
cooperated with the Government in the enforcement of other 
laws involving tracking of assets, such as laws restricting 
the externalization of foreign currency.  The banking 
community and Central Bank also have cooperated with the USG 
in global efforts to identify individuals and organizations 
associated with terrorist financing. 
5.  Zimbabwe is a party to the 1988 UN Drug Convention and 
has signed, but not yet ratified, the United Nations 
Convention against Transnational Organized Crime. 
 
6.  Zimbabwe joined the Eastern and Southern African 
Anti-Money Laundering Group (ESAAMLG), the FATF-style 
regional body, in August 2003.  Zimbabwe has yet to become a 
party to the UN International Convention for the Suppression 
of the Financing of Terrorism. 
 
DELL