Under sweeping new powers aimed at forestalling a looming cash crunch, a statutory instrument printed last month says: “A police officer, acting in accordance with a warrant issued in terms of this section, may require a person to remove any clothing that the person is wearing, but only if the removal of clothing is necessary and reasonable for an effective search of the person.”
Zimbabweans have slated the new law, which make it illegal to hold more than Z$500 million (about US$21) in cash. The new regulation has been promulgated under the Bank Use Promotion and Suppression of Money Laundering Act.
Authorities said Mugabe hurriedly signed the new law to avert a cash crisis in the run-up to the hard-fought March 29 general election.
Bankers have not been warned of the move and were “mystified” about how it would be applied.
The new law says anyone found with cash holdings in excess of Z$500m will be guilty of “unlawful hoarding”. The statutory instrument also outlaws companies from settling any bills for more than Z$250m in cash, in a move aimed at promoting the use of cheques. This means it will now be illegal for companies to buy 10litres of petrol using cash.
In November, the RBZ raised the cheque limit that can be accepted for clearing by 150 percent to a maximum $500 million, amid a sharp rise in demand for cash on the market.
A Germany company engaged by the Reserve Bank is currently printing and delivering Z$170 trillion worth of bearer cheques every week to meet the huge demand for cash. Government is paying the Munich-based Giesecke & Devrient (G&D), US$500,000 a week for this service.
Economist John Robertson feared the announcement would open the way for arbitrary seizures of cash by police as has happened with people found in possession of dwindling necessities like bread, maize meal or fuel.
Post published in: News