TOUGHER PENALTIES FOR FOREIGN CURRENCY OFFENDERS

TOUGHER PENALTIES FOR FOREIGN CURRENCY OFFENDERS

Nevanji Munyaradzi Chiondegwa

In a move aimed at curbing foreign currency abuse, the Ministry of Finance and Economic Development has introduced stricter penalties for individuals and businesses found guilty of exchanging goods and services at rates above the prevailing average interbank foreign currency selling rate.

According to Statutory Instrument 81A of 2024, signed by the Minister of Finance, Economic Development and Investment Promotion, in consultation with the President, offenders will face a combination of fixed and cumulative penalties.

The new regulations, which amend the Schedule to the Exchange Control Act, state that natural or legal persons who offer goods or services at exchange rates above the prevailing average interbank foreign currency selling rate published by the Reserve Bank of Zimbabwe will be guilty of a civil infringement.

The penalty for such an infringement will be a fixed amount of ZW$200,000 or an amount equivalent to the value of the foreign currency charged for the goods or services, whichever is greater. In addition, a cumulative penalty of 5% of the outstanding amount will be applied for each day the fixed penalty remains unpaid, up to a maximum of 90 days.

The new regulations also provide for a 48-hour suspension of the civil penalty order, allowing the alleged defaulter to show cause why the order should not have been issued. If no cause is shown within this period, the order will be deemed to have been issued with effect from the beginning of the period.

The introduction of these stricter penalties is seen as a move to curb the illegal foreign currency trading that has been rampant in the country, and to protect the value of the local currency. The government has been working to stabilize the economy and restore confidence in the financial system, and these new regulations are part of that effort.

The new regulations come into effect immediately, and businesses and individuals are advised to comply with the new rules to avoid facing the penalties.