Bill Watch 50/2019
New Measures to Outlaw Use of Forex in Zimbabwe
29 September 2019
"3.(1) Subject to section 4, no person who is a party to a domestic transaction
shall pay or receive as the price or the value of any consideration payable or
receivable in respect of such transaction any currency other than the
Zimbabwean dollar."
Section 3(2) is a continuation of the general prohibition, commencing "In
particular" and giving specific examples of forbidden activities. Section 3(3)
makes any person contravening the prohibition liable to civil penalties to be
imposed by the Reserve Bank in terms of the Exchange Control Act as
amended by SI 213. [Again the form of the civil penalties is probably not legal.]
There is a definition of "domestic transaction" which only becomes
comprehensible when read with the details in section 3(3).
Section 4 lists transactions excluded from the scope of the prohibition,
including transactions conducted through authorised dealers [e.g., banks] for
which payments in foreign currency are permitted by Exchange Control
directives. Section 5 allows sales of petrol, diesel and other petroleum
products to Guests of State [diplomats and staff of gazetted regional or
international organisations] at fuel outlets specially licensed for the purpose by
the Zimbabwe Energy Regulatory Authority.
Legal Issues
Are the two statutory instruments legally assailable? If, as we think, the
Presidential Powers (Temporary Measures) Act is unconstitutional and void,
and if a court were to so decide, the legal bases of both SI 213/2019 and SI
212/2019 would disappear and they, too, would be void and of no effect in law.
Is the Presidential Powers (Temporary Measures) Act constitutional?
Veritas' position on the Presidential Powers (Temporary Measures) Act has
been repeatedly stated in our bulletins: we believe the Act became
unconstitutional and void when the present Constitution came into force in
August 2013. And it should not be used to make regulations amending Acts of
Parliament.
A recent and highly relevant High Court decision
Only nine days before SI 213 was gazetted, a judgment handed down in the
High Court decided, that section 3 of the Finance Act is unconstitutional to the
extent that it enables the Minister of Finance and Economic Development to
amend a rate of tax stated in another provision of the same Act. Parliament,
ruled Justice Zhou, cannot delegate to a Minister its own primary power to
amend an Act of Parliament.
In addition, as a matter of principle it is highly undesirable that measure of such
impact should be enacted through regulations rather than an Act of
Parliament. They should be subjected to full analysis, questioning and debate
by both Houses of Parliament before enactment.