The Reserve Bank of Zimbabwe (RBZ) has penalised a Chinese brick manufacturing firm after it failed to submit weekly cash sales and deposits in line with measures to stem money laundering.
In June, the Financial Intelligence Unit—an arm of RBZ— served Silver Dragon with an order in which it had to make disclosures in line with Section 11 of the Bank Use Promotions Act.
The disclosure order was personally served by Emmanuel Dengedze to the director of Silver Dragon Bricks who acknowledged receipt of the order by signing. But the Chinese firm failed to adhere to the disclosure order which required it to submit to the Bank Use and Suppression of Money Laundering Unit of the RBZ on a weekly basis, cash sales and deposits and of each previous week business transactions.
Silver Dragon is in the business of retailing and selling its products on a cash basis to the public.
There are, however, indications that from June 30 to September 1, 2020, the brick firm did not submit such returns to the RBZ for 42 days after subtracting Sundays and public holidays.
“We were fined and we are in the process of communicating with the RBZ on the disclosure issues,” Silver Dragon Bricks director Miaoqi Liu told Business Times.
RBZ also recently launched a blitz on errant retail pharmaceutical companies that have been resisting its directive on disclosures issued beginning of July this year.
The latest blitz saw various pharmaceutical bosses being dragged before the courts.
Other companies that have since been brought before the courts over failure to adhere to the disclosure issue include JT Hardware, Manhattan Interiors, Farm Distributors and popular wholesaler Zapalala.
The central bank is putting in place stringent measures aimed at plucking out externalisation of funds, which has seen close to US$1bn being siphoned out of the country since the dollarisation of the country’s economy.
In 2018, the government published a list of more than 1 800 companies and individuals alleged to have externalised more than US$800m.
The penalty on Silver Dragon will bring the spotlight on Chinese firms that have long been accused of doing business on a cash basis and not banking the money.
Several Chinese firms stand accused of unfair labour practices contrary to their “all weather friend” tag.
Beijing, however, sees Zimbabwe as an equal partner and plans to rescue the Southern African nation from the socio-economic crisis.