Harare — THE wanton criminality and lawlessness that had buttressed itself in the corporate world and more importantly, the financial sector, exposed our government's inability to make an effective use of the law to curb crime.

It has only taken the determination and economic wisdom of the Reserve Bank of Zimbabwe governor to attempt to gradually uproot the criminals among those running our economy.

At the height of the mayhem, various laws such as the Serious Offences (Confiscation of Profits) Act (Chapter 9:17), the Prevention of Corruption Act (Chapter 9:16) as well as penalty provisions in numerous statutes and the common law could not be put to good use. These laws, which are an effective arsenal, stood beckoning for the attention of the authorities but apathy from government was the response.

Commentators have judged the government's response to corporate indiscipline in various languages, but whatever their perceptions, it appears a notable stability has ensued especially as relates to the financial sector.

The government must however put to fruition its promise to restore absolute sanity in our economy, more importantly by addressing key vices like money laundering. It is therefore the aim of this article to discuss money laundering with a view to suggesting lasting solutions that will serve and save our economy concretely.

The gazzetting by the government on February 17 2004 of the Bank Use Promotion and Suppression of Money Laundering Bill was a step in the right direction. It registered the government's awareness of the need to pass laws that respond to societal demands.

In broad terms the phrase "money laundering" covers all procedures to change the identity of illegally obtained money so that it appears to have originated from a legitimate source. The common forms of laundering locally in the recent past and to a little extent currently took various forms. The most common were illegal foreign exchange transactions that created monumental profits which were at times used to buy shares on the stock exchange. These were used in setting up cover-up businesses, as well as illegal gold dealing and hoarding of merchandise to create artificial shortages for the purpose of creating demand for resultant resale at exploitative prices.

A common facet of money laundering is the internationalisation of its proceeds as illustrated by the several cases of local business people who were charged with the crime of "externalisation" of foreign currency.

While it would be wrong to accuse all individuals so charged as having been laundering money, a significant number of them rigorously and clandestinely exported proceeds of local crime to far away lands. Some of the culprits have since taken flight and sought refuge in the countries they illegally exported local money to.

The globalisation of economies and financial services has thus given money launderers greater leverage for their criminal activities since the origin of funds can be disguised in an international context.

It must therefore be acknowledged that national initiatives on their own are woefully inadequate to curb this malady.

In addition to consolidating the legal regime targeting money laundering, government also needs to adopt other strategies like entering into international treaties with countries that are common destinations for local criminals.

This latter move is more important if one considers the recent difficulty government and law enforcement agencies have had in having local criminals extradited home to face the music. The diplomatic rift between our government and Britain and the United States as well as the other western powers has opened up easy escape routes and points of hibernation for suspected serious offenders.

Instead of treating these local suspects as criminals their hosts, to spite our government, reward these fugitives with asylum as if they will be escaping political persecution. This is unfortunate because most of the fugitives will be outright criminal suspects fleeing normal prosecution.

Until friendly diplomatic relations are restored with major western powers, and until government adopts a constitutionally legitimate approach to detaining suspects, the unfortunate perception shall be that these fugitives are indeed victims of political harassment.

If such a view persists, local criminals shall always be certain that they have safe havens abroad. It is thus in the interests of justice and the general public that has experienced extreme misery at the hands of corporate criminal syndicates that government re-examines its foreign policy.

It is internationally accepted that dirty money has an extremely dangerous impact on the financial sector. The happenings in our own sector recently can provide a stark illustration of the hazardous nature of laundering syndicates. Were it not for the robust work of Dr Gideon Gono, our economy would have disintegrated and sunk into the oblivion.

It is also obvious that public confidence in banks, and hence their stability, can be gravely undermined by adverse publicity as a result of inadvertent association of banks with criminals. In addition, banks may lay themselves open to direct losses from fraud, either through negligence in screening undesirable customers, or where their own officers steal or their integrity has been undermined through association with criminals.

Rather than concentrate on local crooks alone, the government must also cast its net wider and monitor the activities of foreigners, especially those of West African origin.

Without sounding xenophobic, it is commonly accepted that some West Africans are generally criminal minded and a host of them have been prosecuted for serious economic crimes. Zimbabwe, if it is seen to be lax, might become a destination of laundered money and a playground for international criminal syndicates.

A multi-faceted approach to arresting the proliferation of money laundering is required. Such an approach must commence and take shape through the strengthening of our criminal law. It must then be concretised by a firm commitment on the part of the government without being selective to deal with all suspected criminals without regard to rank or status.

The capacity of the Reserve Bank Money Laundering Unit and the police must be strengthened and sustained. In addition, the participation of the public, through encouraging whistle blowing and a strict monitoring of the flow of funds by financial institutions must commence. Such measures, among a host of others, will certainly curtail the influence of illicit financial dealing.

Vote Muza is a legal practitioner with Gutu & Chikowero law firm.