A six-month investigation in Tanzania has revealed the mushrooming of illegal forex traders that were involved in money laundering.
There had been previous attempts to clamp down on these illegal bureaux but all were futile. To ensure a similar situation does not occur, many bureaux in the country have been shut down, pending introduction of new rules and regulations as well as the punishment to be meted out on those found guilty.
In November, the government consulted with several investigation organs, after which it was agreed that an impromptu inspection of both registered and black market bureaux de change should be carried out at the same time. This led to the closure of up to 37 bureaux in the country. But that was not enough as investigations are still ongoing. Today, February 14, the Bank of Tanzania announced that it has shut down its currency exchange platform in the northern Tanzanian town of Moshi.
Bank of Tanzania’s finance management director, Victor Tarimu, stated that “As other bureaus de change have been shut down in the Arusha region, the Central Forex branch is under investigation and to avoid interference with the investigation, it was necessary to shut down the Moshi bureau.”
In November 2018, the Bank of Tanzania closed down every bureau de change in Arusha. Arusha was a favoured money exchange destination for tourists who found it an easier and faster means of getting local currencies. The Bank of Tanzania also placed a moratorium on licensing of forex bureaux, a move to crack down on illegal operations and money-laundering.
President John Magufuli in December 2018 noted that the reason many bureaux de change in the country have been shut down is that they were evading taxes, “In that intervention, we found that one licensed bureau might have at least seven unregistered bureaux. In 37 bureaux de change, only one was registered.
“When they tried to exchange money using the bureaux there was no indication at TRA that the amount was transacted… this shows that there was no connection between TRA and bureaux de change,” he further noted.
It is still unclear when investigations would be done or if the closed bureaux would be reopened but the Bank of Tanzania governor, Florens Luoga had noted that traders who are found to have flouted the law will be arrested and cases opened against them in the courts.