Current Tanzania Constitution permits searching of people travelling between Zanzibar and Mainland Tanzania because currency is NOT a union matter.
Tanzania Minister of Finance and Planning, Dr. Philip Mpango (L) has published regulations ordering declarations of cash at entry and exit points around the country.
By Jaston Binala
The Tanzania Minister of Finance and Planning, Dr. Philip Mpango has published regulations ordering declarations of cash at entry and exit points around the country, but chaos looms amid the well intended regulations.
The newly introduced Cross-border Declaration of Currency and Bearer Negotiable Instruments Regulations, which force everybody entering or leaving the country to declare hard cash or financial instruments is meant to stem out capital flight and mitigate financing of terrorism in the country, according to Financial Intelligence Unit (FIU) Commissioner, Mr. Onesmo Makombe.
But the country’s financial system remains schizophrenic as if Zanzibar is a separate nation– which stands a good chance it will bring chaos during implementation of the regulations.
Tanzania Revenue Authority (TRA) has announced “with effect from 1st October, 2017, any physical transportation of currency and bearer negotiable instruments equal to or above the prescribed amount [which is USD10,000] shall be declared by filling declaration forms Issued by Customs Officers at entry or exit points. Non declaration or false declaration of the prescribed amount is an offence punishable by law.”
Acting Commissioner of Customs and Excise George Mnyitafu
The notice signed by Acting Commissioner of Customs and Excise George Mnyitafu said the announcement is published to implement the Anti-Money Laundering Act, Cap 423 and the Anti-Money Laundering (Cross-Border Declaration of Currency and Bearer Negotiable Instruments) Regulations, 2016.
Through this law, TRA is mandated to administer Cross border declaration of currency and bearer negotiable instruments “in respect of cross Border physical transportation of currency or bearer negotiable instruments equal to or Above USD 10,000 or its equivalent in Tanzanian Shillings or any foreign currency by”
But the new regulations have been introduced against a backdrop of a ‘split-personality’ financial system in which people travelling in and out of Zanzibar may not have to declare finances because money is not a union matter. Mainland Tanzania controls illicit finance through the Anti-Money Laundering Act while Zanzibar uses a law called the Anti-Money Laundering and Proceeds of Crime Act.
A Bank of Tanzania (BoT) official who worked as Manager of the Microfinance and Bureau de Change Supervision Directorate of the Banking Supervision Directorate during the interview, Mr. Eliamringi Mandari, once told this website the Minister of Finance is the only authority in Tanzania empowered by law to stop the unlimited transportation of cash out of the country through a ministerial decree. The decree has now been issued, but money remains a non-union matter as stipulated in the Tanzania Constitution currently in force.
Eliamringi Mandari
Mr. Mandari predicted that if the Minister of finance were to publish a decree to control the transportation of cash, this would mean that everybody travelling between Zanzibar and Mainland Tanzania must be searched for possession of cash because this is not a union matter– which can result in chaos considering the volume of traffic between Zanzibar and mainland Tanzania.
The source of chaos would be the Tanzania Constitution currently in force, which stipulates that the Central Bank is a union institution, but money is NOT a union matter such that Zanzibar is free to make its own rules on how to manage money—which means anybody landing directly into Zanzibar or exiting Tanzania from the myriad of exit points on the archipelago is constitutionally not necessarily bound to obey the newly introduced Anti-Money Laundering Act, Cap 423 and the Anti-Money Laundering (Cross-Border Declaration of Currency and Bearer Negotiable Instruments) Regulations, 2016 unless otherwise stated categorically by the Zanzibar government.
The Governor of the Bank of Tanzania, Prof. Benno Ndulu said Tanzania operates with two financial regulation Acts because this is the political agreement reached in the Union of Tanganyika and Zanzibar, adding that this mutual agreement will remain that way until the politicians agree otherwise.
Financial Intelligence Unit (FIU) Commissioner, Mr. Onesmo Makombe
Mr. Makombe, Commissioner of the Tanzania Financial Intelligence Unit is in the meantime upbeat on potency of the new regulations. Talking to major players in implementation of the new regulations during a recent two-day workshop at the Bank of Tanzania, the commissioner said the Crossborder Declaration
of Currency and Bearer Negotiable Instruments Regulations will enable the country to obtain important statistics on the movement of hard cash in and outside the country.
“The statistics will enable the country to identify criminal activities, to reduce capital flight and to enable us reduce—if not completely eradicate movement of money which is proceeds of crime, and the money meant to finance terrorism,” Mr. Makombe said, adding that “criminals like to travel with hard cash because they are afraid us using banks which have become quite sophisticated, but also because loopholes exist at entry and exit points.”
Offenders will face penalties which shall include confiscation of cash and criminal charges in the courts of law, he said.
Those in attendance at the workshop meant to prepare stakeholders in the implementation of the regulations included officials from the Customs Department, Ministry of Finance and Planning Tanzania Mainland, Ministry of Finance, Zanzibar, Ministry of Foreign Affairs, Tanzania Revenue Authority, The Zanzibar Revenue Board, Defence and Security organs, and The Zanzibar Anti-Illegal Cross-Border Trade (KMKM).
Anti-Money Laundering (Cross-Border Declaration of Currency and Bearer Negotiable Instruments) Regulations, 2016. Workshop participants in photos labelled 1 and 2. (Photo Credit: Ministry of Finance and Planning).
Other in attendance included the Tanzania Posts Corporation, Director of Public Prosecutions (Zanzibar), Director of Public Prosecutions (Tanzania Mainland), Tanzania Airports Authority Zanzibar and Mainland Tanzania, Tanzania Communications Regulatory Authority (TCRA) and the Tanzania Immigrations Department’s Illicit Finance Control Department.
Mr. Makombe asked workshop participants to implement the Anti-Money Laundering (Cross-Border Declaration of Currency and Bearer Negotiable Instruments) Regulations, 2016 diligently with a high degree of integrity to stop criminals from implementing evils schemes that endanger national security. Read our earlier story here.
