Money laundering risks and the corruption factor, its management within the financial sector of Zimbabwe (1983-2017+)

Abstract

This empiric contextual study on ML risks and the corruption factor and its management within Zimbabwe’s financial sector’ covering period (1983 to 2017) was undertaken to explore and bring better understanding of the phenomena: influences, nexus, ramifications and in the final, propose measures to enhance the effectiveness of AC & AML regimes in the country. Built on available conceptual literature and the empirical evaluation of multiple Zimbabwean contextual case studies in which intermediary institutions (banks/financial institutions and public officials respectively: their owner executives/management, and, their opposite in government, (hereinafter) cited as (PEPs) were/are implicated, the study employed a multiple/mixed case study design of quantitative approach, coupled with the utilisation of qualitative secondary data collection approaches dictated to by the aim and objectives of the study. The ‘head office’ approach, mirrored on the British Retail Consortium (BRC) in their ‘Retail Crime Costs’ surveys (1994): that of accessing target respondents at various of their organisations outlets to obtain data by postal questionnaire(s), was used on a drop and pick basis, in combination with door to door visits, e-mails and, follow-ups by phone and direct interviews. at (Police HQ, Ministry of Justice and the two banks). The approach is credited for accessing and aggregating large sample size data in good time and, at relatively low cost. Guided also by the overriding aim and objectives, a synthesis of two time-honoured, and, contemporary criminological theories in the main: the rational choice, and, social determinist perspective, complemented by four choice concepts: 1. ‘Public choice concept by Caiden (2001)’ et.al., 2. Bad apple theory by Graaf, (2003); 3. Situational action theory; and, 4. Organizational culture theory by Wilkstrom (2004); all, relevant, leading to a discourse that seek to explain factors contributing to corruption and ML and, their control using a triangulation of measures mainly: situational, and social plus tertiary, were employed to benchmark the research. The findings, broadly considered, reveal among others things that, firstly and secondly; the link between corruption and ML is symbiotic and, at least two fold in that the proceeds of corruption, particularly when substantial, are prone to be laundered, and that, when conjoined, the effects of corruption and poor governance can weaken the successful operations of AML regimes. Third but not last was/is that, corruption and ML collectively can, prove difficult to accomplish as the mutual relationship between them tends to be historically and bureaucratically skewed. In closing, are recommendations for banks and government to help enhance the effectiveness of existing and new AML structures/regimes, proliferated with justified emphasis on improved enforcement, legislations and regulatory measures (e.g.), emplacement of human, legal, technical and operation capacity (where non exist). Included also is under (Chapter 7), is the ‘premise’ of ‘cross-organisational isomorphism’: learning from other organisations, and/or, other people’s grand disaster experiences akin to the grand financial disasters suffered by the Zimbabwean victim banks studied herein – by way of communication through security risk awareness and prevention education and specific training.