Exchange Control (Amendment of Schedule to Exchange Control Ord)

The Minister of Finance, in consultation with the President, has rewritten the exchange-rate pricing offence in the Civil Penalty Orders Schedule to the Exchange Control Act.

The infringement is now defined plainly: a natural or legal person selling goods or services commits a civil infringement if the goods or services are offered at an exchange rate above the prevailing average interbank foreign currency selling rate published by the Reserve Bank of Zimbabwe.

The penalty has two parts. There is a fixed penalty of ZiG200 000, or an amount equal to the value of the foreign currency charged for the goods or services, whichever is greater. On top of that runs a cumulative penalty of 5% of the outstanding fixed penalty for every day it remains unpaid, beginning the day after the civil penalty order is served and running for up to 90 days. Left unpaid for the full 90 days, the cumulative element alone would multiply the debt several times over.

There is a short right of reply. The operation of a civil penalty order is suspended for 48 hours from issue so the alleged defaulter can show cause to the designated officer why it should not have been issued. If no cause is shown in that window, the order is deemed to have taken effect from the start of it. If good cause is shown, the designated officer must withdraw the order and note the withdrawal in the civil penalty register.

This is the instrument behind the enforcement action against retailers pricing above the official rate, and it bites on ordinary shops and service providers, not only on financial institutions.

One drafting inconsistency is worth noting: the enacting words cite the Exchange Control Act as [Chapter 22:05] while the header and the amendment cite [Chapter 9:23]. The marginal note also says "Substitution of Paragraph 2(12)" although the section repeals and replaces both subparagraphs (12) and (13). No commencement date is stated; the Gazette Extraordinary date is 9 May 2024.