The Reserve Bank of Zimbabwe’s Financial Intelligence Unit (FIU) is intensifying its monitoring of car dealers suspected of engaging in money laundering activities. Concerns have been raised about the lack of regulation in the car dealership industry, which is seen as a potential avenue for illicit financial transactions.
According to Mr. Oliver Chiperesa, the director-general of the FIU, Zimbabwe is estimated to be losing between US$1 billion and US$1.5 billion due to money laundering. While there are no international standards specifically for car dealerships, countries are given the freedom to include sectors they deem at high risk of money laundering. In Zimbabwe’s case, the car dealership sector has been identified as one such area.
To address these concerns, the FIU is collaborating with other stakeholders, including the police and the Central Vehicle Registry, to enhance the regulatory framework for car dealers. Currently, there is no register of registered car dealers in the country, as there is no regulatory authority responsible for their registration. Establishing a regulatory body will be a crucial initial step toward bringing accountability to the industry.
Mr. Chiperesa emphasized the importance of maintaining records for every car sale to ensure transparency and enable the tracking of suspicious transactions. Currently, some transactions go unrecorded, particularly those conducted with cash. Having a regulatory authority overseeing the industry would make it easier to enforce record-keeping practices and report any suspicious activities.
Superintendent Godwin Mvurume, the acting commanding officer for the Commercial Crimes Division (Northern Region) of the Zimbabwe Republic Police, highlighted their collaboration with the FIU in combating money laundering within the car dealership sector. Their approach involves following the money trail and seeking court intervention to freeze and seize assets linked to financial crimes. However, car dealers have been reluctant to provide necessary information, necessitating further collaboration with the FIU to find workable solutions.
In March 2022, Zimbabwe was removed from the grey list of the Financial Action Task Force after demonstrating full compliance with global anti-money laundering standards and ensuring that its banks were not being used to finance terrorism.
