Cash shortages and cash offences
Various legislative and policy interventions have being employed by the government and the Reserve Bank to try and address the permanent cash shortages bedevilling the country.
Rights: MIRIAM TOSE MAJOME
Save for the increase of usage of cashless transaction platforms the other interventions have yielded no observable success so far. If anything, the situation is worsening and cash is becoming more and more scarce every month. The recent policy pronouncement regarding cash by the Reserve Bank and implementation of sections of the Bank Use Promotion and Suppression of Money Laundering Act Chapter 24:24 are some of these measures.
Cash constitutes private property and entails exclusive rights of ownership. Anyone who legally owns property has enforceable rights over that property and can use it howsoever they want within legal limits. Section 71(2) of the Constitution states: Every person has the right in any part of Zimbabwe to acquire, hold, occupy, use, transfer, hypothecate lease or dispose of all forms of property either individually or in association with others.
Accordingly, the owner of property, such as cash, has or should have exclusive ownership rights over it and this is guaranteed in the Constitution.
However, there are legislative limits that operate to limit an owner’s exclusive rights over their property. Subsidiary legislation and policies control and limit exclusive ownership rights of acquisition, holding, usage, transfer and disposal of their property — cash in this particular case. Traders and other commercial entities are compelled to have bank accounts and use banks to transact and deposit cash every business day.
We will look at the prescribed cash offences as set out in the Act.
It goes without saying that cash deemed to be connected with the prescribed cash detainable offences can be seized as evidence. It is should be returned but best wishes trying to get it back or at least getting it back as cash.
The Bank Use Promotion and Suppression of Money Laundering Act Chapter 24:24 is an act to promote the use and suppress the abuse of the banking system, to enable the unlawful proceeds of all serious crime including drug trafficking to be identified, trace, frozen, seized and eventually confiscated, to establish a Bank Use Promotion and Suppression of Money Laundering Unit, to require financial institutions and cash dealers to take prudential measures to help combat money laundering and to provide for matters concerned with or incidental to the foregoing.
Bank Use Promotion and Suppression of Money Laundering Unit
The unit under the Reserve Bank of Zimbabwe (RBZ) has been redeployed into the business sector to implement the recently announced policy and sections of the Act. The unit has wide ranging powers to identify and facilitate the punishment of traders, who commit any of the prescribed misdemeanours.
Traditionally, in this country, there is no love lost between the government and business. Government deems business an untrustworthy and unscrupulous partner, while business deems government as a hostile and stifling partner. Implementation of the RBZ cash policy has already claimed its first scalps, with some businesses being fined recently for not operating bank accounts and not depositing cash takings with banks.
The unit’s major objective is to promote the usage of banks and financial institutions in order to put less pressure on the demand for cash.
The unit is tasked with encouraging the public to use banking facilities for cash transactions. It monitors the business sector’s activities and receives and transmits reports of suspicious transactions to the central bank.
It compiles statistics and gathers information both in the country and out for matters regarding cash transactions. It issues guidelines and directions to financial institutions, traders and commercial entities pertaining monetary and cash policies.
Powers of inspectors
This is particularly important for traders and businesses, which receive and handle cash. Inspectors from the unit are empowered to enter all business premises without notice and demand to inspect business records.
They have a right to interview the proprietor, manager or any employee of the business about any questions related to the company’s systems and cash handling.
In the event of uncertainty over forced disclosure of confidential information, it is best to consult a lawyer first over the rights of the business.
It is an offence to deny unit inspectors access to premises or refuse to co-operate with them and furnish requested information and records.
However, what is prescribed by the Act, it is instructive to remember that basic rights and freedoms prevail. This includes the right to privacy, right to legal representation and freedom from coercion.
Even though traders are compelled to co-operate with unit inspectors, they cannot be physically forced to disclose any information. The RBZ will have to resort to the prescribed measures to obtain any withheld information. They are allowed to confiscate necessary documents in the interests of public safety, public order and for the prevention, investigation or detection of offences.
Section 13 compels all traders and parastatals to keep records clearly showing daily cash receipts and payments. The records are supposed to show details of the payees and the purpose for the payments. Records are also required to be kept for the alternative payment methods used such as point-of-sale, bank transfers, mobile money transfers and cheques. Such records should be kept and produced on demand.
Evidently there is a lot of policing of the business sector. The benefits and purpose of so much interference with business operations remains to be seen.
These are summarised here but are found in detail in the Act. Offences are such as failing to open a bank account, failing to deposit cash, settling debts above $5 million in cash, failing to maintain trading records as required and failing to furnish proof of cash deposits.
When traders commit any of these offences, they can be issued with compliance orders, which are notices calling on them to comply and remedy whatever breach they are deemed to have fallen foul of.
When the breach continues and the compliance order is not heeded, criminal charges may be proffered. We will discuss the legalities of selling cash next week in the conclusion of the discussion of cash offences.
Miriam Tose Majome is a lawyer and a teacher. She can be contacted on firstname.lastname@example.org