THE Private Voluntary Organisation Amendment Bill is meant to curb financial terrorism and money laundering by some non-profit organisations that an inter-governmental organisation, Financial Action Taskforce, has unearthed as conduits for criminal activities in the country, legislators have heard.
FAFT has noted that charity organisations and trusts were receiving foreign funding under the guise of performing philanthropic work but channel the funds to criminal activities resulting in the purchase of properties in and outside the country.
Justice, Legal and Parliamentary Affairs Minister Ziyambi Ziyambi told the National Assembly that he had received information from FAFT, an inter-governmental organisation meant to combat money laundering, that some charitable trusts were being used as fronts for several criminal activities.
Minister Ziyambi said this recently while steering the PVO Amendment Bill which seeks to streamline the administrative procedures for PVOs to ensure their efficient registration, regulation and the combating of the financing of terrorism.
“Accordingly, this Bill does not speak to those law-abiding PVOs I have just mentioned, but to the few who may be tempted to use the guise of charity to carry out undesirable, harmful and even criminal activities.
“For instance Mr Speaker, we have received communication from the Financial Action Task Force (which is the world’s policeman against money laundering) that some charitable trusts are being misused as a means for channelling funds to fund terrorism and other criminal activities, or to launder the proceeds of criminal activities by, for instance, buying up properties in Zimbabwe and other countries,” said Minister Ziyambi.
According to the memorandum of the Bill, one of the objectives of the amendments is to comply with the recommendations FATF made to Zimbabwe.
FATF is an inter-governmental organisation founded in 1989 on the initiative of the G7 countries.
It’s main objective is to develop policies to combat money laundering and Zimbabwe is a member.
Each member country is assessed periodically for compliance with the policies and legislation on money laundering and financing of terrorism.
The memorandum stipulates that countries are assessed on two major criteria, which are technical compliance and effectiveness.
“Technical compliance is concerned with deficiencies related to the country’s anti-money laundering and financing of terrorism legislation while effectiveness is concerned with deficiencies which highlight practical implementation challenges.
“This Bill seeks to comply with recommendations under technical compliance raised under Zimbabwe’s Mutual Evaluation Report,” reads the memorandum.
“As a result of the said deficiencies, Zimbabwe was placed under a monitoring programme in October 2018 by FATF in order to ensure the country aligns its laws on private voluntary organisations to recommendation Eight whose objective is to ensure that non-profit organisations are not misused by terrorist organisations whether as a way for such terrorist organisations to pose as legitimate entities; or to exploit legitimate entities as conduits for terrorist financing, including for the purpose of escaping asset freezing measures; or to conceal or obscure the clandestine diversion of funds intended for legitimate purposes, but diverted for terrorist purposes.
“As such, there is a need to have clear laws that set out a framework that allows us to prevent any potential abuse in key sectors.”
Minister Ziyambi said in terms of the law, every charity that uses money collected from the public or donated from a foreign Government or foreign agency is required to be registered as a PVO in terms of the Private Voluntary Organisation Act which the Bill seeks to amend.
He commended some PVOs carrying out beneficial work in communities where they came in to fill gaps in terms of resources or expertise that might be deficient.
Minister Ziyambi said some of them come in by providing assistance in the form of programmes and projects in sectors such as health and education provision, assisting widows and orphans, providing food relief and carrying out empowerment programmes for women, the youth and disabled.
“We, as Government are very grateful for the help given by the PVOs. The best PVOs have access to resources, experience and expertise solely needed by the people they benefit. From the bottom of my heart, I say to them, on behalf of the Government, ‘Thank you for the good work you are doing and please keep it up’,” he said.
Minister Ziyambi said Government is aware that there were some charitable organisations that acted in a politically partisan manner by directing money to favoured political parties or candidates at the expense of other political parties or candidates.
“Partisan assistance using foreign money or money collected from the public under the guise of charity must never be allowed to influence the outcome of national or local elections.
“In many developed countries Mr Speaker, this kind of behaviour is understood to be harmful to the very idea of charity. In the United States for example, you cannot register any organisation as a non-profit organisation for tax purposes if that organisation campaigns or canvasses for any political candidate or party,” he said.
Minister Ziyambi said he was engaging civil society organisations on how to improve the Bill and they had since expressed a willingness to co-operate.
“We do not want our PVOs to operate in a climate of fear in which they feel they may be subjected to criminal prosecution because they might unwittingly involve themselves in partisan political activities,” he said.