Bill Watch 50/2019
New Measures to Outlaw Use of Forex in Zimbabwe
29 September 2019
BILL WATCH 50/2019
[29th September 2019]
Further Government Measures To Outlaw Use of
US Dollars & Other Foreign Currencies in Domestic Transactions
Background
Three months ago, when the Minister of Finance and Economic Development
gazetted SI 142/2019 [link] declaring RTGS dollars to be the only legal tender
in Zimbabwe, press headlines referred to the "outlawing" of the use of the US
dollars and other foreign currencies in Zimbabwe. Ministers and officials said
the same thing.
In Bill Watch 32/2019 [link] dated 24th June – the same day SI 142 was
gazetted – Veritas, however, cautioned that the SI did not in law forbid the use
of foreign currencies in Zimbabwe and was, therefore, not as far-reaching as
its makers had perhaps intended.
Latest Measures to Outlaw Use of Foreign Currency
The Government has now taken further steps to outlaw the use of all foreign
currencies in domestic Zimbabwean transactions. In a Government Gazette
Extraordinary released after close of business on Friday 27th June two closelylinked statutory instruments made by the President were published, effective
immediately:
SI 213/2019 – Presidential Powers (Temporary Measures) (Amendment of
Exchange Control Act) Regulations, 2019 [link]
This is a ten-page set of regulations made by the President in which he amends
the Exchange Control Act to expand his own regulation-making powers under
the Act to authorise him to make regulations for "the enforcement of the
exclusive use of Zimbabwe dollar for domestic transactions". The term
"domestic transaction" is not defined.
Other amendments to the Act by the SI introduce a detailed "civil penalty"
system under which the Reserve Bank is empowered to impose civil penalties
for contraventions of regulations made under the new power. The Schedule
containing the provisions for civil penalties take up 8 pages of small print [some
of them are probably not legal]
The enabling statutory authority cited for the regulations is the Presidential
Powers (Temporary Measures) Act. In Veritas' view this Act is
unconstitutional. See comment later in this bulletin.
SI 212/2019 – Exchange Control (Exclusive Use of Zimbabwe Dollar for
Domestic Transactions) Regulations, 2019 [link]
This is a much shorter set of regulations in which the President uses the new
power he has given himself by SI 213 to enact the following general
prohibition in section 3(1):