PROSECUTING THE ICT INDUSTRY:
MONEY LAUNDERING AND PROCEEDS OF CRIME
1. Purpose of POCA.
Why bother the CSZ & ICT industry ?
2. Who/what are now targeted ?
Financial Institutions & DNFBPs - Duties of -STRs
3. What is prohibited ? Transactions & Wire Transfers
4. How ? Instrumentality
5. Penalties - Powers of NPA - Criminal + Civil liabilities
6. Powers of Ministers + RBZ
7. What should CSZ do now ?
FI ‗s + DNFBP‘s , called “dodgies”, are
subjected to AML/CFT regulation
because their services render them
vulnerable to abuse
by criminals for “dodgy transactions ”
enabling ML or TF purposes
― FI ‖
person who conducts as a business
any of the following
for or on behalf of a customer—
acceptance of deposits and repayable funds from the public,
including private banking
(b) lending, consumer credit, mortgage credit, factoring ,f inancing of
(c) financial leasing
(d) transfer of money or value
(e) managing means of payment, credit and debit cards, travellers‘
cheques, money orders , bankers‘ drafts, and electronic money;
(f) issuing financial guarantees and commitments;
money market instruments
money transfer agencies
bureaux de change.
interest rate and index instruments
commodity futures trading
participation in securities
Infrastructure Development Bank
Collective Investment Schemes
Any person providing any financial service declared to be a financial service
Business or Professions
casino licensee, lottery licensees
precious stones dealer
precious metals dealer
any person engaged in mining or exportation of, or dealing in
Public Accountants and Auditors
who do :-
(j) safekeeping & administration
on behalf of other persons;
of cash or liquid securities
(k) investing, administering of money on behalf of other persons;
(l) underwriting ,placement of life insurance and other investmentrelated insurance,
(m) currency changing;
(n) the provision—
A. or cession of a life insurance policy or the
provision of reinsurance
B. of investment-related insurance services; or
C. of insurance underwriters or brokers;
WHAT IS MONEY LAUNDERING?
variously defined as the process of –
► concealing illicit gains from criminal activity;
► cleaning-up dirty money;
► taking the proceeds of criminal activity and making them appear
Criminals want their illegal funds laundered because they
can then move their money through society freely, without
fear that the funds will be traced to their criminal deeds.
laundering prevents the funds from being confiscated by the
Money laundering offences
(1) Any person who converts or transfers property—
(a) knowing, believing or
that it is the proceeds of
(b) for the purpose of concealing or disguising the illicit origin of such
property, or of assisting any person who is involved in the commission of
a serious offence , to evade the legal consequences of his or her acts or
(2) ..who conceals or disguises the true nature, source, location,
disposition, movement or ownership of or rights with respect to
property, knowing or suspecting that such property is the
proceeds of crime…
(4) Participation in, association
with or conspiracy to commit,
an attempt to commit, and aiding, abetting, facilitating and
counselling the commission of any of the offences referred to in
subsections (1), (2) and (3)
commits an offence.
Money laundering offences
2x value of ppty
9 Terrorist financing
(1) Any person who by any means,
directly or indirectly,
provides or collects funds, or
attempts to do so, with the intention
that they should be used or in the
knowledge that they are to be used in
whole or in part—
(a) in order to carry out a terrorist
by a terrorist to facilitate
that person’s activities
related to terrorist acts or
membership in a terrorist
(c) by a terrorist organisation;
commits an offence.
(3) It shall also be an offence
accomplice in an offence within the
meaning of subsection (1);
(2) An offence is committed—
even if the terrorist act
there referred to does not occur or is
not attempted; and
even if the funds
were not actually used to
commit or attempt the terrorist act
there referred to; and
the State or territory in
which the terrorist act is intended or
Section 9 penalties
Terrorist financing offences
$ 5 k or 2x value of ppty
Prison 35 years
which all countries (whether
FATF members or not) are
expected to implement for
combating ML, TF and
who are either members of the
FATF itself or members of
FSRBs are associate
members of the FATF.
Eastern and Southern Africa
Anti-Money Laundering Group
of which Zimbabwe is a
― Grey List ― of 23 countries committed to the FATF
standard, but have not yet implemented it.
addressing AML/CFT deficiencies are….
Antigua and Barbuda
Trinidad and Tobago
The role of
FIU established in 2004 within RBZ
analyze the data and pass on financial intelligence on
suspected ML, TF or other crime to law-enforcement agencies.
oversee AML/CFT compliance by
and their reporting institutions’ supervisory
coordinate formulation and implementation of AML/CFT policies at national level and act as the
national contact point for AML/CFT coordination and cooperation with relevant
organizations such as FATF, ESAAMLG and other FIUs.
under POCA “competent supervisory authorities” ie CSZ are required to co-operate with
the FIU to ensure compliance by the respective institutions or
persons whom they regulate
“dodgies” and their competent supervisory authorities
Financial Institutions & DNFBPs - Duties of –
or prison for 3 years
Customer identification and verification requirements:
Cross- border correspondent relationships
- if unable to validate,
immediate report to FIU
kept for 5 years after business relationship ended
Putting in place internal programmes to combat ML and TF:
(d) policies and procedures to prevent the misuse of technological
developments including those related to electronic means of
storing and transferring funds or value;
Compliance officer shall be designated at management level and
Requirements for ongoing due diligence & monitoring of special transactions:
What is prohibited ? STR‘s red flags
for IT Agents Employees & Consultants of ―dodgies‖
Neither the FATF Standards, nor POCA define what a “suspicious transaction” is.
Examples of “red flag indicators” that should commonly raise suspicion of possible ML/TF include:► Moving funds to and from a “dodgy” employer’s Client account without any underlying legal
transaction backed up with instructions to/provision of services by the “dodgie’s”
o Eg funds being deposited into the “dodgie” client account, from which the funds are
subsequently transferred to 3rd parties, with no apparent underlying transaction/instruction.
► Unexplained aborted transactions / instructions
o IT should be wary of clients who, after depositing funds with the “dodgie” for a specified
purpose, make an unexplained u-turn and ask the funds to be paid back to the client or 3rd
parties, without rational explanation for the u-turn.
o In such cases, the “client” simply used their “dodgie” client account to place dirty money in the
financial system and clean it up.
Cash purchases of high value assets e.g. real estate, in circumstances where the amount of
funds is inconsistent with the client’s known or apparent legitimate sources of income.
In Zimbabwe, where mortgage finance is difficult, cash purchases of immovable
property are common and, very often the legal practitioner, accountant and estate
agent involved never carry out client due diligence to ascertain who their client really is
and what the source of funds is.
They want their fees + their Commissions
― any transaction exceeding us1000
carried out on behalf of an originator through a financial
(including an institution that originates the wire transfer
and an intermediary institution that participates in
completion of the transfer)
by electronic means with a view to making an amount of
money available to a beneficiary person at another financial
Verification of identity of originator;
Obtain or maintain the account number or unique reference
number of originator;
Verification of the originators address, place of birth and national
Include the above information in records and also in the
message accompany transfer.
(1) No FI shall establish or maintain any anonymous account, or an account under
(2) No shell bank may be established or permitted to operate in or through the territory of
(3) No person shall enter into or continue business relations with a shell bank or a
respondent FI in a foreign country that permits any of its accounts to be used by a shell
(4) No DNFBP shall effect or facilitate a transaction where any director, principal, officer,
partner, professional, agent or
―dpoppae‖ of the business or
profession knows or has reasonable grounds to suspect that a party to the transaction is
acting anonymously or under a name that is not his or her own, unless the dpoppae
concerned in the transaction is satisfied as to the true identity of the party and that there
are legitimate reasons for the party so to act.
(5) Where a
has effected or facilitated a transaction in which a party is acting
anonymously or under a name that is not his or her own, the dpoppae concerned in
the transaction shall, on behalf of the business or profession of which he or she is the
dpoppae, record its reasons for doing so and shall keep the record for at least 5
years after the completion of the transaction.
by gross negligence—
imprisonment for 10 years, or both .
(6) Any person who intentionally or
Penalties - Powers of NPA Criminal
1. interdicts applicable for twelve (12) months unless renewed before expiry;
2. property seizure orders where there is likelihood of dissipation or alienation of
3. confiscation orders after conviction,
or before conviction when accused absconds
4. benefit recovery orders to recover to the State all proceeds of crime;
5. civil forfeiture order where the property is tainted/terrorist property or used as an
instrumentality for such purposes.
6. Property freezing orders to preserve tainted, terrorist property or property used as
an instrumentality for such purposes
7. Monitoring order for information where a defendant has carried out or is carrying out
8. Customer Information Order where information of a certain customer is required
from financial institution
9. Production order where information concerning nature, identity, ownership and location
and appurtenant documents will be required to enable transfer and conveyancing
Compensation order made against NPA by a court as compensation of defendant for
property previously under confiscation, property, benefit recovery order etc where it has been subsequently
proven that the defendant was not guilty in a criminal trial
Powers of Director of FIU
liabilities Sects 4(1),(6) (8) , and
5 and 6
may issue Directive(s) for the best administration of the objectives of
POCA, providing for civil penalties , upon application to High
Court/Administrative Court/other superior courts be confirmed, varied ,or set
aside. – directing :
certain individuals shall no longer be allowed to be employed entirely or in
certain institutions, professions or capacities;
revocation and cancellation of
the named individual or institution;
licenses ,registration, permits etc of
sanctions against errant individuals or persons.
Fine not exceeding US$ 5OO per day of default of compliance
how adequate / actionable /legal are the means of enforcement?
Declaration of Rights of the new
What should CSZ do now ?
IT is in control
Training Members and non-members
Creating awareness of global provisions of ML laws ,
or face designation by the Minister as a DNFPB
- like the Law Society already is
– claiming client privilege as a ―defence‖ for non
compliance with STR‘s
Applied globally - IF RBZ & FIU DO THEIR WORK
Therefor SELF –REGULATE ? To create good
e-government practices ?
If you want to go fast go alone
If you want to go far go together
ICT Policy ?
Regs to be drafted
Draft ICT Act ?
By CSZ ?
e – Government