Zimbabwe Introduces Stiff Foreign Currency Regulations, Penalties up to ZWL$5 Million

The Zimbabwean government has gazetted new foreign currency regulations in which violations will attract a fine of up to five million dollars.

Statutory Instrument 127 of 2021 stipulates that foreign currency seekers are expected to properly use money sourced from the Reserve Bank of Zimbabwe’s auction system.

Companies that obtain the money through the RBZ auction and use it for other purposes will be fined ZW$1 million.

According to Clause 3(1) of the Statutory Instrument, “A natural or legal person shall be guilty of a civil infringement if he or she without Exchange Control authority, uses the foreign currency obtained directly or indirectly from a foreign exchange auction or an authorized dealer for a purpose other than that specified in the application to partake in the auction or in the application for foreign currency.

“Failure to comply with the regulations, the defaulter shall face a combination of a fixed penalty of the amount of one million Zimbabwe dollars or an amount equivalent to the value of the foreign currency obtained (whichever is the greater amount); and a cumulative penalty over a period not exceeding ninety days …”

The Statutory Instrument, gazetted through the Presidential Powers (Temporary Measures) (Financial Laws Amendment) Regulations, 2021, further stipulates that it is now an offence for goods and services to be charged only in U.S dollars.

“… A natural or legal person shall be guilty of a civil infringement if he or she, being a seller of goods or services not authorized by law to charge for them exclusively in foreign currency, refuses to allow any buyer thereof to tender payment for them in Zimbabwe dollars at the ruling exchange rate.”

Defaulters are set to face “a fixed penalty of the amount of fifty thousand Zimbabwe dollars or an amount equivalent to the value of the foreign currency charged for the goods or services in question (whichever is the greater amount).”

The Statutory Instrument also states that “an authorized dealer shall be guilty of a civil infringement if he or she submits to the Reserve Bank an application for foreign currency or exchange control authority, or a return or any other document in connection therewith, without exercising reasonable due diligence to verify the correctness of the information in or accompanying the application, return or document, with the result that the application, return or document contains information that the authorized dealer knows or ought to have known to be false in any material respect.”

Defaulters will face a fixed penalty of the amount of ZWL$5 million.

Author: Staff Writer

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