Unexplained wealth orders here to stay

Published: 12 July 2019
THE proposed introduction of a free-standing procedure which compels an individual to explain the source of his wealth is a radical development in English law. For instance, the human rights and political implications of the unexplained wealth orders (UWOs) is a matter that needs to be urgently explored, for if there are any implications, it is best for the government to consider these than to be surprised.

Fighting corruption is on the new Government of Zimbabwe's docket. However, since the declaration of war against corruption on the dawn of November 15, 2017, enforcement authorities have not made any significant gains in fighting the scourge.

The new government’s anti-corruption mantra is slowly beginning to lose support because it is failing to net in those individuals publicly known to be corrupt.

As a result, it has further divided an already polarised nation.

One solution that have been on many peoples lips, both those optimistic and pessimistic about the new dispensation’s sincerity to fight corruption, has been to audit the lifestyles of high net-worth individuals.

For handful countries in the world struggling to contain financial crimes, especially those with less resources and capacity to fight sophisticated white-collar crime, the crime UWOs becomes an option in order to allow the High Court to make unexplained wealth-orders - court orders designed to elicit
explanations from persons who exhibit possession of great wealth without having apparent lawful means of obtaining such wealth.

An unexplained wealth-order, which can be obtained by specified authorities without prior notice to the person concerned, require that person to explain his or wealth and provide supporting documentation showing it was lawfully obtained. The aim is to combat money laundering, terrorist financing, tax evasion and corruption.

If no satisfactory explanation is provided, forfeiture of property may follow. Put in other words, the concept of unexplained wealth can be summarised as follows:

To that end, Zimbabwe has amended the MLPCA to authorize the Money Laundering and Proceeds of Crime Amendment Bill (2019) that seeks to give the Zimbabwe Anti-Corruption Commission (Zacc), Zimbabwe Revenue Authority (Zimra) and Zimbabwe Republic Police (ZRP) and the National Prosecuting Authority (NPA) powers to obtain a court order to forfeit and seize properties of people seen with wealth without the means of obtaining it. Through an application to the High Court for an order known in the financial crimes parlance as an UWO.

Procedural history

The order has been in place since November 9, 2018 when President Emmerson Mnangagwa controversially passed Statutory Instrument 246 of 2018, in terms of the provisions of Section 6 of the Presidential Powers (Temporary Measures) Act [Chapter 10;20], Presidential Powers (Temporary Measures) (Amendment of Money Laundering and Proceeds of Crime Act and Exchange Control Act).

The President made a temporary provision for such orders in the Presidential Powers (Temporary Measures) (Amendment of Money Laundering and Proceeds of Crime Act and Exchange Control Act) Regulations, 2018, gazetted in SI 246/2018 of November 9, 2018 and made under the Presidential Powers (Temporary Measures) Act [PPTM Act].

However, the regulations expired on the one hundredth and eighty first day following the date of commencements of the regulations, which was the midnight of May 8, 2019.

The Minister of Finance and Economic Development Professor Mthuli Ncube sought to introduce the Micro Finance Bill to amend the Micro Finance Act.

Clause 34 of the Bill provided for the enactment into permanent law of the temporary regulations enacted by SI 246/2018 under the Presidential Powers (Temporary Measures) Act on November 9, 2018 to beat the foreseen deadline.

The Bill went through Parliament as Finance (No. 3) Bill, 2018.

Parliament recommended: Deletion of provision for UWOs from the Bill provided for the enactment into permanent law of the temporary regulations controversially enacted by SI 246/2019.

The Minister accepted the deletion of this clause when former Minister of Finance and a member of the main opposition party Tendai Biti correctly, pointed out that it should not have been included in a Money Bill confined to revenue measures [Constitution, Fifth Schedule, paragraph 7].

However, the temporary regulations were still in force despite Parliament’s refusal to include them in a money Bill until they expired at midnight on May 8, 2019.

The government failed to keep the regulations on the statute book without a break, by failing to pass an appropriate Bill through Parliament and gazetted as an Act on or before May 8.

As temporary measures, however, the regulations were functional for only 180 days from November 9 unless re-enacted by an Act of Parliament.

And, as they were not so re-enacted, they expired at midnight on Thursday, May 8.

The result of this expiry is that from May 9 onwards, no new applications for unexplained wealth orders can be lodged with the High Court on May 28, 2019 for printing and gazetting.

Thus, on July 5, 2019, the government gazetted the Bill, which was published in the Government Gazette, to amend the Money Laundering and Proceeds of Crime Act [Chapter 9; 24].

The amendment of the Money Laundering and Proceeds of Crime Bill is intended to insert a new part into the Money Laundering and Proceeds of C