S1 212: Legal perspective
GOVERNMENT has taken steps to stop unscrupulous businesses from quoting, charging and accepting payments in United States dollars or any kind of foreign currency.
This follows the promulgation of Statutory Instrument 212 of 2019, Statutory Instrument 212 of 2019 Exchange Control (Exclusive Use of Zimbabwe Dollar for Domestic Transactions) Regulations 2019.
The SI that was published in an Extraordinary Gazette on Friday, has been introduced in response to some businesses who were transacting in foreign currency.
Justice, Legal and Parliamentary Affairs Minister Ziyambi Ziyambi said the regulations were promulgated to ensure there is no continued use of the United States dollar and any other foreign currencies in domestic transactions.
“The thrust is not to start with criminal sanctions, but to ensure that we bring discipline in the current market,” he said.
“We want to ensure that people do not quote or charge in foreign currency. In terms of this legal instrument people are not taken to court or charged, but they are fined by the central bank.”
The SI 212 of 2019 are regulations made in terms of Section 2 of the Exchange Control Act (Chapter 22:05).
The regulations make it illegal for one to pay or to receive payment in foreign currency in any domestic transaction.
Explaining the new regulations, Harare lawyer Mr Rogers Matsikidze said it is a civil offence to pay or receive payment in foreign currency. The SI further expands the circumstances where such receiving or paying in foreign currency is unlawful.
The following are some of the circumstances listed; quoting, displaying, charging, soliciting for payment or receiving payment for goods services, fee or commission in any other foreign currency.
Mr Matsikidze said anyone paying or receiving foreign currency will be committing an offence at law.
“In addition, if one is to settle for any obligation by barter for a consideration that is not denominated by or is not valued in the Zimbabwean dollar commits a civil offence,” he said.
“What this means is you cannot denominate or value any product or service in some form of currency or figurative language evading the Zimbabwean dollar.”
The Exchange Control Regulations were followed by the promulgation of Presidential Powers (Temporary Measures) (Amendment of Exchange Control Act) Regulations, 2019-SI 213 of 2019. These regulations are also made in terms of Section 2 of the Presidential Powers (Temporary Measures) Act, Chapter 10:20).
The regulations provide any enforcement mechanism for those SI 212 of 2019. Instead of making such violations only criminal this time these violations of SI 212 of 2019 results in civil penalty orders.
“So SI 213 of 2019 is simply the enforcement mechanism for any breach by any person. There are huge fines that can be paid for breach,” said Mr Matsikidze.