A Run for Your Externalised Money

On 13 December 2017, the former Zanu PF Central Committee member, Mr James Makamba returned to Zimbabwe after twelve years of self-imposed exile. Mr Makamba skipped bail and fled Zimbabwe in 2005 after being charged with eleven counts of contravening the Exchange Control Act [Chapter 22:05] as read with the Exchange Control Regulations, 1996 Statutory Instrument No. 109 of 1996. Five of the counts were in connection with the alleged externalisation of foreign currency by unlawfully making payments outside Zimbabwe. Many others have faced similar charges but there have not been any significant convictions. According to The Herald, the poverty stricken nation bled about US$3 billion in the final two years of Mr Robert Gabriel Mugabe’s reign.

As part of “Operation Restore Legacy” in the former bread basket turned basket case, President Emmerson Dambudzo Mnangagwa granted a three month amnesty period commencing on 1 December 2017 within which individuals and corporate entities could repatriate externalised money with no questions asked and no criminal charges preferred against them. Failure to take advantage of the amnesty would result in arrest and prosecution.

The Exchange Control Act and the Regulations and Orders made thereunder give the President a wide range of powers to regulate the export of money and commodities and the receipt of foreign money that is due to be paid in Zimbabwe. In addition to regulating gold, currency and securities, the President is empowered to regulate exchange transactions, imports and exports from Zimbabwe, transfer or settlement of property and transactions in relation to debts as he seems fit. The proclamation by the President is thus lawful and can be legally enforced outside Zimbabwe. The amnesty having come to an end, the public has been informed that about US $250 Million has been received by the Central Bank. Presumably the State will now pursue those who should have heeded the amnesty call but did not. The State will have to launch investigations, prosecutions and hopefully repatriation of illegally externalised money and assets. The question is how can any necessary investigations be carried out outside Zimbabwe.

The Criminal Matters (Mutual Assistance) Act [Chapter 9:06] provides for mutual assistance in criminal matters between Zimbabwe and other countries. It empowers the Prosecutor- General to request assistance from other countries, which assistance includes the service of documents, the location and identification of witnesses or suspects, conducting search and seizure, location, forfeiture and confiscation of property, recovery of penalties, interdicting dealings in property and freezing of assets. The long arm of the law can thus reach illegally expatriated money and proceeds thereof where they can be found. Unfortunately this only applies to countries with which Zimbabwe have reciprocal agreements and these countries are Australia, Dominica, Germany, Ghana, Portugal, South Africa, Italy, Zambia, Slovak Republic and Bulgaria. It is very doubtful that Zimbabweans were stashing their ill-gotten gains in most of these countries with whom we have reciprocal agreements. It is more probable that people have stashed their money in the United Kingdom, The United States of America, Mauritius, Seychelles, Hong Kong, Singapore, New Jersey, Panama, the United Arab Emirates and Switzerland.

The Presidential Powers (Temporary Measures) (Amendment of Exchange Control Act) Regulation, 2017 Statutory Instrument No. 145 of 2017, was a three month amendment to the Exchange Control Act that retrospectively decriminalised its violation. It granted amnesty to any person who before 1 December, 2017 illegally expatriated currency, gold, precious stones and securities, proceeds from any sale or alienation of the said property or movable or immovable property acquired from the such proceeds. The Regulations precluded the Reserve Bank and the National Prosecuting Authority from prosecuting a person who would have taken advantage of the amnesty or imposing civil or administrative penalties for any act constituting the illegal expatriation of property or any activity constituting a misrepresentation or non-disclosure necessary to facilitate the illegal expatriation of property.

The amnesty was supposed to be complementary to the much touted drive against corruption. Much media publicity has certainly attended the interrogation by Parliament of those perceived to have improperly benefitted from the gravy train. Will there be prosecutions of those who

brought the country to its knees? If history is anything to go by we will see no prosecutions and the only US $3 Billion this country will see will be in a speculative newspaper.

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