Zimbabwe has promulgated Statutory Instrument 127 of 2021 that empowers its central bank to impose penalties on businesses and persons that actively break regulations in the Foreign Exchange Act (22:05) and the Banking and Use Promotion Act (24:24).

Some of these regulations relate to pricing goods and services only in forex in line with the prevailing multicurrency environment; Issuing a local currency receipt for a foreign currency purchase, and use of foreign currency acquired through the central bank’s auction system.

In terms of the new regulations, companies face a fine of up to ZWL$1 million (approximately US$11 800) or an amount equivalent to the value of the foreign currency obtained will be imposed for misuse of foreign currency obtained from the Reserve Bank of Zimbabwe’s foreign currency auction system.

And both businesses and individuals will also be liable for a penalty of ZWL$50 000 if they refuse to accept
payment in local currency at the prevailing official exchange rate, or if they charge above the official rate.

Reads part of SI-127:

“One will be guilty, if he or she without Exchange Control authority, uses the foreign currency obtained directly or indirectly from a foreign exchange auction or an authorised dealer for a purpose other than that specified in the application to partake in the auction or in the application for foreign currency.”

The countries’ authorities have also made local financial institutions liable for their clients’ actions as banks can now be penalised for a false or inappropriate application for foreign currency on the auction system. In this regard banks face a ZWL$5 million fine.