ZIMBABWE: 2005 INTERNATIONAL NARCOTICS CONTROL

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
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