Presidential Powers Temporary Measures Currency Revaluation Regulations 2006 (Statutory Instrument 199 of 2006)

Statutory Instrument 199 of 2006

 Presidential Powers Temporary Measures Currency Revaluation Regulations 2006

(Click here to view sections 50 and 51 of the Finance (No. 2) Act, 2006 (No. 12 of 2006) which saved these regulations.)

ARRANGEMENT OF SECTIONS

Section

3. Issue of new bearer cheques, saving in force of certain coins and banknotes at revalued rate and expiry and exchange of old bearer cheques.
4. Limitations on exchange of old bearer cheques.
5. Rounding-off of converted sums.
6. Operations of financial institutions, traders, etc., to conform to new currency system.
7. Preparation of financial statements in terms of old and new currency systems.
8. Temporary indication of prices for goods and services in both currency systems.
9. Cheques and other negotiable instruments.
10. Effect of conversion to new currency system on debts, contracts, securities, etc.
11. References to old currency system in enactments.
12. Immunity where official powers or functions exercised in good faith.
13. Issue of directions for purposes of these regulations. 14. Regulations to bind the State
14. Amendment of Cap. 24:24.

First Schedule: Rounding-Off of Converted Sums.

Second Schedule: Indication of Prices for Goods and Services in both Currency Systems.

Third Schedule: Words be Endorsed by Drawers on All Cheques Drawn on and Between the 1st August, 2006, and 31st August, 2006.

HIS Excellency the President, in terms of section 2 of the Presidential Powers (Temporary Measures) Act [Chapter 10:20], hereby makes the following regulations:

1. Title

These regulations may be cited as the Presidential Powers (Temporary Measures) (Currency Revaluation) Regulations, 2006.

2. Interpretation

(1) In these regulations “billion” means a thousand million;

“cheque” means a cheque (other than a Reserve Bank bearer cheque) as defined in section 72 of the Bills of Ex change Act [Chapter 14:02];

“cheque in transit”, for the purposes of section 9(2)(a)means a cheque—

• in the process of being cleared between two financial institutions; and
• that is stamped by one of the financial institutions on presentation with a date not later than the 1st August, 2006;

“contract” includes—

• an agreement for the settlement of a delictual claim; and
• an employment contract; and
• a contract for the sale, letting or hire of immovable property; and
• a sale effected in any shop in the ordinary course of the business of such shop, or any other consumer contract for the sale or supply of goods or services or both in which the seller or supplier is dealing in the course of business and the purchaser or user is not; and
• a policy as defined in the Insurance Act [Chapter 24:07]; and
• a pension scheme or arrangement;

“currency” means the coin and paper money of Zimbabwe including Reserve Bank bearer cheques;

“customer”, in relation to a financial institution, means a person who operates an account with that financial institution;

“declaration of source” means a declaration in the form provided by the Reserve Bank in which a person declares the source of any income earned by him or her;

“debt”, without limiting the meaning of the term, includes anything which may be sued for or claimed by reason of an obligation arising from statute, contract, delict or otherwise

“negotiable instrument” means any bill of exchange other than a cheque, whether negotiable or not, which has been drawn or issued either inside or outside Zimbabwe and is intended to enable any person to obtain, either directly or indirectly, any sum of money, whether in Zimbabwean or foreign currency, and includes— (a) a letter of credit or draft;

• a negotiable certificate of deposit;
• a banker’s acceptance;
• a promissory note;
• a postal order, money order or traveller’s cheque
• any order or authorisation, whether in writing, by electronic means, or otherwise to a financial institution to credit or debit any account;

“new currency system” means the currency system brought into force in Zimbabwe in accordance with these regulations on and after the 1st August, 2006;

“new bearer cheque” means a Reserve Bank bearer cheque referred to in section 3(1);

“old bearer cheque” means a Reserve Bank bearer cheque issued before the 1st August, 2006;

“old currency system” means the currency system in force in Zimbabwe immediately prior to the 1st August, 2006;

“pension scheme or arrangement” means any scheme or arrangement established or operating in Zimbabwe the principal object of which is to provide benefits for persons who are or have been members of the scheme or arrangement upon their retirement on account of age or ill-health or other termination of service or on attaining a specified age, whether or not such scheme or arrangement also provides for the payment of benefits in other circumstances, or for dependants or nominees of de ceased members;

“Reserve Bank” means the Reserve Bank of Zimbabwe referred to in section 4 of the Reserve Bank of Zimbabwe Act [Chapter 22:15];

“Reserve Bank bearer cheque” means a cheque payable to bearer issued in terms of section 42A of the Reserve Bank of Zimbabwe Act [Chapter 22:15] or section 3(1) of these regulations;

“revalued currency” means a banknote or coin referred to in section 3(2);

“security” means any of the following—

• shares, stocks, bonds, debentures and debenture stock;
• units under a unit trust scheme;
• a renounceable letter of allotment or a letter of rights;
• a warrant conferring an option to acquire, or a deposit certificate in respect of, any thing referred to in paragraphs (a) to(c);

but does not include a cheque or negotiable instrument;

“tax clearance certificate” means a valid tax clearance certificate issued to a person by or on behalf of the Commissioner-General of the Zimbabwe Revenue Authority under section 34C(1)(a), (b) or (c) of the Revenue Authority Act [Chapter 23:11] (No. 17 of 1999);

“trade documentation” means any record of information whatsoever used in connection with the sale or proposed sale of goods or services to a consumer thereof, including— (a)           an invoice;

• a receipt;
• a bill of lading;
• a price tag or label;
• any coupon, stamp, ticket or voucher;
• a written estimate or quotation of a price, charge or fee;
• any broker’s note, share certificate or other document evidencing title to a security;

“unexpired old bearer cheque” includes a Reserve Bank bearer cheque whose expiry was postponed to the 31st December, 2006, by Statutory Instrument 166 of 2006.

(2) Any word or expression to which a meaning has been assigned in the Bank Use Promotion and Suppression of Money Laundering Act [Chapter 24:24] shall have the same meaning when used in these regulations.

3. Issue of new bearer cheques, saving in force of certain coins and banknotes at revalued rate and expiry and exchange of old bearer cheques

• There shall be issued Reserve Bank bearer cheques of the following denominations— (a) one cent, five cents, ten cents and fifty cents; and
  • one dollar; and
  • ten dollars; and
  • twenty dollars; and
  • fifty dollars; and
  • one hundred dollars; and
  • five hundred dollars; and
  • one thousand dollars; and
  • ten thousand dollars; and
  • one hundred thousand dollars;

which shall become legal tender on the 1st August, 2006, and be deemed to have been issued in terms of section 42A of the Reserve Bank of Zimbabwe Act [Chapter 22:15].

• With effect from the 1st August, 2006, all coins and banknotes made and issued by the Reserve Bank under section 40(1) of the Reserve Bank Act [Chapter 22:15], whose denominations, designs, forms and material were, pursuant to section 40(2) of that Act, determined by the President in—
• the Reserve Bank of Zimbabwe (Issue of Coins) Notice, 2001, published in Statutory Instrument 111 of 2001; and
• the Reserve Bank of Zimbabwe (Issue of Five Dollar Coin) Notice, 2001, published in Statutory Instrument 267 of 2001; and
• the Reserve Bank of Zimbabwe (Issue of $500 Banknote) Notice, 2003, published in Statutory Instrument 181 of 2003; and
• the Reserve Bank of Zimbabwe (Issue of $1000 Banknote) Notice, 2003, published in Statutory Instrument

182 of 2003; together with the one cent and five cent coins and ten dollar, twenty dollar, fifty dollar and one hundred dollar banknotes that circulated alongside the coins and banknotes referred to in paragraphs (a) to (d), shall remain in force at the revalued rate in relation to old bearer cheques specified in subsection (4).

• Every unexpired old bearer cheque shall expire at 2400 hours on the 21st August, 2006, and the Reserve Bank shall not, on and after that date, be required to make payment to the holders of those bearer cheques.
• Subject to section 4, with effect from the 1st August, 2006, to the 21st August, 2006, every financial institution shall exchange old bearer cheques for revalued currency or new bearer cheques at the rate of one thousand dollars of the old bearer cheque for one dollar of the revalued currency or new bearer cheque.
• All deposit balances at a financial institution that are denominated in terms of the old currency system on the 1st August, 2006, are automatically converted in accordance with the new currency system.
• No financial institution shall, on or after 2400 hours on the 21st August, 2006, exchange or accept any old bearer cheque:

Provided that a financial institution shall accept from its customers who are traders or parastatals and exchange old bearer cheques before the close of normal business hours on the 22nd August, 2006.

• No financial institution shall impose any fee, commission or other charge whatsoever—
• in respect of the exchange of currency in terms of subsection (4) that will result in the financial institution concerned discounting more than two comma five per centum of the sum of the revalued currency or new bearer cheques that would otherwise have been paid under subsection (4);
• in respect of the conversion from the old currency system to the new in terms of subsection (5).

(8) Any financial institution which contravenes subsection (4), (5) or (7)(a) or (b) shall be guilty of an offence and liable to a fine of any amount up to or exceeding level fourteen.

4. Limitations on exchange of old bearer cheques

(1) Any person who, on and between the 1st August, 2006 and the 21st August, 2006, deposits or brings for exchange in terms of section 3(4) at any single financial institution—

• an amount of old bearer cheques whose total face value is or exceeds—
  • five billion dollars (or such other amount as the Reserve Bank may specify by notice to financial institutions generally), in the case where the person is a trader, parastatal or person other than an individual; or
  • one hundred million dollars (or such other amount as the Reserve Bank may specify by notice to financial institutions generally), in the case where the person is an individual;

or

• two or more amounts of old bearer cheques within any period of seven consecutive working days, whose total face value adds up to or exceeds five billion dollars or one hundred million dollars (or such other amounts as the Reserve Bank may specify by notice to financial institutions generally), as the case may be; shall be required to produce to the financial institution a tax clearance certificate and a declaration of source.
• If any person, on and between the 1st August, 2006, and the 21st August, 2006, deposits or brings for exchange in terms of section 3(4) at any single financial institution an amount or amounts of old bearer cheques of or in excess of those specified in subsection (1), the financial institution concerned shall issue to that person a one-year currency stabilisation bond for the amount sought to be deposited or exchanged.
• If any person is issued with a one-year currency stabilisation bond in terms of subsection (2), the financial institution concerned shall immediately (and in any event within a period of forty-eight hours of the issue of the bond) report the matter to the Bank Use Promotion and Suppression of Money Laundering Unit constituted under the Bank Use Promotion and Suppression of Money Laundering Act [Chapter 24:24], which shall inquire into the source of the cash referred to in subsection (2), and if—
• the cash is found to be the subject or proceeds of a cash detainable offence or serious offence as defined in the Bank Use Promotion and Suppression of Money Laundering Act [Chapter 24:24]—

(i)   the cash shall be confiscated and dealt with in accordance with that Act; and (ii)        the bond shall be cancelled; or

• the cash is not found to be the subject or proceeds of an offence referred to in paragraph (a), the bond shall be redeemed on maturity for its face value together with interest at the monthly average rate for Treasury Bills calculated from the month of issue.

(4) For the avoidance of doubt it is declared that old bearer cheques shall continue to be legal tender between the 1st August 2006, and the 21st August, 2006:

Provided that no financial institution shall, during that period permit the withdrawal within any period of seven consecutive working days of any amount of old bearer cheques of or exceeding five billion dollars by any trader, parastatal, or person other than an individual, or one hundred million dollars by any individual (or such other amounts as the Reserve Bank may specify by notice to financial institutions generally).

5. Rounding-off of converted sums

• For the avoidance of doubt, it is declared that one dollar of the revalued currency is equivalent to one hundred cents, corresponding to two decimal places.
• Whenever the decimal part resulting from the conversion of old bearer cheques to the revalued currency or new bearer cheques contains more than two digits, and the third decimal digit resulting from the conversion is equal to or above five, the second decimal digit shall be rounded upwards to the higher cent, as shown in Examples1 and 2 set out in the First Schedule.
• Whenever the decimal part resulting from the conversion of old bearer cheques to the revalued currency or new bearer cheques contains more than two digits, and the third decimal digit resulting from the conversion is below five, the effect of the rounding-off shall be that the second decimal digit remains the same, as shown in Example 3 set out in the First Schedule.
• Notwithstanding this section, where the nominal value of any security is denominated in units of less than four dollars and ninety-nine cents of the old currency system, the nominal value shall be expressed in fractions of a cent of the new currency.
• For the avoidance of doubt it is declared that marginal losses or gains resulting from rounding-off in accordance with this section shall lie where they fall.
• No suit, prosecution or other legal proceedings shall lie against the Government, the Reserve Bank or any financial institution in respect of any losses resulting from rounding-off in accordance with this section.

6. Operations of financial institutions, traders, etc., to conform to new currency system

(1) Subject to subsection (3), every financial institution, trader, parastatal or other person engaged in the sale of goods or services shall, no later than the 21st August, 2006, take all necessary steps to bring its operations into conformity with the new currency system, including—

• the adjustment, redesigning, reconfiguration or, where necessary, replacement of its computer software or hardware or computer networks;
• the adjustment, redesigning or, where necessary, replacement of all relevant machinery, equipment, accessories or systems other than computer software or hardware or computer networks;
• the amendment, redesigning or, where necessary, replacement of its trade documentation, payroll systems, ledgers and books of account.
• Any person who contravenes subsection (1) shall be guilty of an offence and liable to a fine of any amount up to or exceeding level fourteen or to imprisonment for a period not exceeding five years or to both such fine and such imprisonment.
• The Reserve Bank may issue such written directions of a general or specific character to all financial institutions, traders, parastatals or other persons engaged in the sale of goods or services or to any such person or class of such persons as, in its opinion, are necessary or convenient to be issued for the better implementation of this section.
• A direction issued in terms of subsection (3) may exempt, for a specified period, whether conditionally or otherwise, any financial institution, trader, parastatal or other person engaged in the sale of goods or services from the provisions of subsection (1), if the Reserve Bank is satisfied, after consultation with the Minister, that such an exemption will be in the public interest and will promote the objective of the smooth transition from the old to the new currency system.
• Any person who contravenes or fails to comply with any provision of a direction in terms of subsection (3) shall be guilty of an offence and liable to a fine of any amount up to or exceeding level fourteen.