FIU Flags Car Dealers As High-Risk Sector For Money Laundering ⋆ Pindula News
Source: FIU Flags Car Dealers As High-Risk Sector For Money Laundering ⋆ Pindula News The Reserve Bank of Zimbabwe’s crackdown on dirty money has put car dealerships in the spotlight, with the bank’s Financial Intelligence Unit (FIU) revealing that automobile trading scores high across all risk indicators. FIU Director General Oliver Chiperesa warned that the […]
The Reserve Bank of Zimbabwe’s crackdown on dirty money has put car dealerships in the spotlight, with the bank’s Financial Intelligence Unit (FIU) revealing that automobile trading scores high across all risk indicators.
FIU Director General Oliver Chiperesa warned that the sector has become the most vulnerable part of the country’s financial system. He said:
“The national risk assessment is a vital instrument in identifying, prioritising and understanding risks associated with money laundering, which emanates from both within and outside our borders.”
Chiperesa, who also chairs the National Task Force on anti-money laundering, said the third National Risk Assessment (NRA) rated Zimbabwe’s overall money laundering risk as medium, pointing out that car dealerships as one of the highest-risk sectors.
The NRA found that 95% of sampled dealers import vehicles and trade almost entirely in US dollars, often operating without proper licensing or oversight.
Between 2019 and 2023, the country’s vehicle population grew by 25%, creating what investigators describe as a cash-heavy environment vulnerable to money laundering, smuggling, corruption, and tax evasion. The NRA warns:
“Car dealers remain unregulated. The cash-intensive nature of their transactions makes it difficult to trace the source of funds.”
Car dealerships were the only sector rated high risk across all three measures, threat, vulnerability, and money laundering, out of 14 sectors assessed in Zimbabwe’s third National Risk Assessment (NRA).
They were followed by real estate agents and precious metals and stones, both rated medium-high risk.
The report identified smuggling (US$920m), illegal gold and precious metals trading (US$880m), corruption (US$730m), fraud (US$500m), and tax evasion (US$300m) as major sources of illicit funds.
Together with drug trafficking, these crimes generated an estimated US$6.15bn over five years, about 3.4% of GDP.
Chiperesa stressed that the NRA is not just about exposing risks but also strengthening defences, aligning Zimbabwe with international standards, and protecting the integrity of the financial system.
The banking sector, the backbone of financial transactions, was rated medium risk, with corporate, private, trade finance, and SME lending identified as particularly vulnerable.
While compliance has improved through enhanced customer due diligence and suspicious transaction reporting, banks’ compliance units remain under-resourced, and penalties for breaches are weak.
Other sectors showed varied risk: the securities and insurance industries were medium-low risk, though new financial instruments and under-resourced compliance units pose concerns.
Real estate agents, lawyers, and precious metals dealers remain medium-high risk due to cash-heavy transactions, opaque structures, and weak reporting.
The NRA called for stronger monitoring, training, and enforcement across these sectors.
The report also flagged environmental crimes, the informal economy, and virtual assets like cryptocurrencies as emerging risks requiring urgent regulation.
Findings from the NRA will inform Zimbabwe’s 2025–2029 Anti-Money Laundering and Counter Financing of Terrorism Strategy, aiming to tighten oversight, close loopholes in car and gold trading, and enforce stricter compliance across high-risk sectors.
