Tanzania: FOREX Bureaus shut down over money laundering and tax evasion.

A six-month investigation in Tanzania has revealed the stabilization of illegal forex traders that were involved in money laundering.

THE BIG PICTURE: The BANK of Tanzania (BoT) has planned to review some bureaus de change regulations to enhance operational efficiency and plug loopholes for illegal foreign currency trading and money laundering, AllAfrica reported.

According to the NerveAfrica magazine, many attempts to clamp down on these bureaus accused of money laundering have been set up but in vain.

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.

All began in November 2018 when the bank of Tanzania(BoT) promised to crack down on illegal foreign exchange bureaus in the country. On February 14, 2019,  the Bank of Tanzania announced that it has shut down its currency exchange platform in the northern Tanzanian town of Moshi.

“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”, Bank of Tanzania’s finance management director, Victor Tarimu, told the NerveAfrica.

The BoT’s reasons for closing the Forex Bureaus.

Suspicion of money laundering and associated illegal transactions is the main reason behind Monday’s closure for inspection of foreign exchange shops, the Citizen reported.

The Tanzanian central bank announced a string of measures to control the foreign exchange business, including suspending new licenses, in a bid to crack down on illegal operations and money-laundering.

Tax evasion is the primary cause for suspending the forex bureaus in Tanzania. President John Magufuli in December 2018 stated some irregularities:  “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”.

Tanzanian President, John Pombe Magufuli, nicknamed the Bulldozer, has come into power with a ‘new force’ not like his predecessors’ such as Jakaya Kikwete, Benjamin Mkapa, where he has shown a ‘zero tolerance’ against corrupt persons in his administration.

Magufuli has been accused by international and national activists to rule with the ‘ironclad rules’ which infringe on human rights.

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