In the notice to Ecocash, addressed to Jabangwe, the FIU said it sought to impose administrative penalties on the entity and the individuals for failure to comply with obligations imposed on financial institutions and their officers, employees, directors and agents in terms of section 5 of the Act.
"Ecocash's failure to carry out its obligations in terms of the Act is directly attributable to the incompetence, ineptitude and unprofessionalism in the execution of duty by its management and directors more particularly Natalie Jabangwe, the chief executive officer, and Eddie Chibi, a director who plays a prominent role in the day to day operations of Ecocash," the notice said.
"Natalie Jabangwe and Eddie Chibi are therefore herein charged in their individual capacities, jointly and severally with Ecocash, on all charges," it added.
The first charge is listed as failure to comply with any mandatory of a circular, directive, or guideline issued in terms of the Act. On 4 may, 2020 the FIU issued and served a directive on Ecocash titled "Suspension and Re-registration of all Ecocash Agent Accounts with transaction limits above Z$100 000".
"This was after the FIU had noted the ongoing abuse of Ecocash agent lines for foreign currency parallel market activities, which Ecocash had failed to curb despite persistent engagement and requests by the FIU. The FIU had noted that transactions of substantial value were being undertaken as between agent to agent, with no visible lawful purpose nor underlying business rationale," the FIU alleges.
Among other things the directive required Ecocash to suspend and freeze the accounts of all Ecocash agents with transaction limits of above Z$100 000 per month and commence a relicensing and KYC enhancement exercise in respect of the suspended agents.
The FIU said Ecocash defied the directive by failing, refusing or neglecting to suspend and freeze the accounts of the high threshold agents that fell under the categories referred to by Ecocash as bulk payers.
"Ecocash's brazen defiance of a regulatory directive calls into question the suitability of Natalie Jabangwe and Eddie Chibi to hold prominent positions in a financial institution of the size and status of Ecocash or for that matter any regulated financial institution," the FIU said.
Under the second charge the company and its directors are charged with failure to comply with any obligation relating to customer identification and or verification or alternatively failure to maintain books and records as required under section 24 of the Act. Alternatively, they are charged with failure to avail to the FIU upon request books and records referred to in Section 24 of the Act or any information contained therein.
On the 1st of May the FIU issued and served Ecocash with a directive which required the company to freeze the accounts noted by the FIU to have moved millions of dollars during the seven-day period from 22 – 28 April, 2020 whereby the transactions were inconsistent with the purposes for which the agents were licensed and also inconsistent with the nature and size of their respective business.
"The high value hyper activity in the accounts of the listed agents were all the more suspicious in the context of the national lockdown when most legitimate businesses were closed and financial activities were expected to be low," the FIU said.
Ecocash was supposed to furnish the FIU with business addresses, lists of director and lists of shareholders and nature of business and source of funds of each entity.
According to the FIU Ecocash failed to comply with the directive until close of business on the 15th of May, 2020 and when it complied the company provided information with was deemed as falling far short of what was requested.
Ecocash could not provide names of a chief executive officer or Managing Director even of one agent, nor lists of shareholders and some of the addresses were incomplete of patently false, the FIU alleges.
Ecocash is also alleged to have failed to report a suspicious transaction as required in terms of Section 30 of the Act.
The unit alleges that some Ecocash agents conducted transactions of very high value in relation to their size and nature of business with cumulative figures almost as high as Z$10 million in a space of seven days.
"All the agents were obscure entities therefore registering such high turnover in a matter of days ought to have roused's Ecocash's suspicions," the FIU said.
Under the fourth charge the Ecocash bosses are being charged with disclosing to a customer or to third party that a suspicious transaction report has been, is being, or will be submitted to the Unit.
Ecocash,Jabangwwe and Chibi are required to respond to the charges with seven days of receipt of the letter.
This development comes as Zimbabwe is already on notice after being placed, together with five other African countries, under enhanced surveillance by the Financial Action Task Force (FATF), an inter-governmental body which fights money laundering and terror financing.
The other countries are Botswana, Ghana, Mauritius and Uganda and one of the main issues against Zimbabwe was that there were no prosecutions being done on money laundering in the country.
