By Tendai Rwodzi

Introduction

The regulatory landscape in Zimbabwe and globally continues to evolve at a rapid pace due numerous requirements that are becoming more detailed, technical in certain instances and demanding. This requires businesses to dedicate significant resources to understanding their obligations and maintaining compliance across the organisation.

As a result, the financial cost of compliance has been rising exponentially over the last few years, placing pressure on organisations that are already operating in constrained economic environments. On the other hand, it is increasingly clear that inadequate compliance can have far severe financial and reputational consequences.

Expanding Scope of Regulation

The growing regulatory burden is not confined to a single area. Businesses are now required to navigate multiple overlapping compliance regimes. These include obligations around anti-money laundering, counter-terrorist financing and counter-proliferation financing, data protection and privacy, cybersecurity, and emerging frameworks around artificial intelligence governance etc. In addition, sector-specific requirements imposed by regulators in financial services, telecommunications, mining, real estate, and other designated industries continue to evolve. Managing these obligations internally can be complex, resource intensive, and increasingly unsustainable without specialised support. This expanding web of obligations has made compliance a central challenge for businesses worldwide, and the consequences of failing to meet these standards have been severe

Consequences of Inadequate Compliance Systems

Globally, regulators have imposed significant penalties on organisations for compliance failures.

One of the most notable cases was Wells Fargo in the United States, which faced billions of dollars in fines and settlements for noncomplaint unethical practices (Between 2016 and 2022).[1] The scandal not only cost the bank financially but also severely damaged its reputation, leading to leadership changes and years of regulatory oversight. This case illustrates how weak compliance systems can allow unethical practices to permeate leading to the crippling of even the largest institutions.

Locally, Zimbabwean regulators have also heightened enforcement. The Financial Intelligence Unit (FIU) has imposed penalties on financial institutions and designated nonfinancial businesses for non-compliance with anti-money laundering and counter-terrorist financing obligations. In 2025, four banks were fined between US$5,000 and US$30,000 each for deficiencies in customer due diligence, transaction monitoring, and sanctions compliance.[2] Enforcement action has not been limited to banks. Other sectors, including real estate agents, car dealers and dealers in highvalue goods, were subject to financial penalties ranging between USD2,500 toUS$22,000 in 2024 for compliance failures.[3]Beyond monetary penalties, regulatory action may include administrative sanctions, suspension of operations, and in serious cases, criminal liability.

The Insurance and Pensions Commission has statutory authority to impose civil and administrative penalties, including fixed fines and cumulative daily penalties for noncompliance with its directives.

Similarly, non-compliance with tax obligations may result in penalties enforcement measures by the Zimbabwe Revenue Authority.

Zimbabwe has seen businesses closed down for failing to meet basic licensing and regulatory requirements. In 2025, the Harare City Council shut down 463 businesses, with 413 of them operating without valid licences.[1] These closures demonstrate that the cost of ignoring compliance is far greater than the expense of embedding it into business operations.

Noting the above adverse consequences of noncompliance compliance should not be treated as a peripheral or reactive function. It must be embedded within business processes and decision-making structures. When compliance is seen as an afterthought, businesses expose themselves to risks that can erode profit margins through fines and inefficiencies.

Outsourcing Compliance: A Strategic Response In the current environment where businesses are under pressure to manage costs while maintaining regulatory standards, outsourcing some compliance functions can be as a practical and strategic solution. This however, does not mean that the business negates its responsibilities and its regulatory accountability. Outsourcing enables organisations to access specialised expertise and structured compliance frameworks without the overhead of maintaining a fully resourced second line of third line in-house function. It provides access to specialised expertise, ensuring alignment with evolving regulatory expectations.

Services that may be outsourced include policy and procedure drafting and regulatory framework alignment, defining and mapping obligations, regulatory advisory and horizon scanning, compliance risk assessment, gap analyses, monitoring and reporting, and ongoing compliance support.

Conclusion

The consequences of non-compliance, measured in closures, fines, and reputational damage, means that a robust compliance programme is a business imperative. As regulatory expectations continue to increase, businesses can explore cost effective approach to compliance. Outsourcing some compliance functions provides a practical pathway for businesses to maintain robust compliance frameworks while managing costs effectively. For businesses that may be uncertain about how to strengthen their compliance structures, professional guidance is available.

About Honey & Blanckenberg

Honey & Blanckenberg is the oldest legal firm in Zimbabwe. Established in 1893, Honey & Blanckenberg is a full-service law firm that carries out a wide range of legal work for its diverse clients including large local and international corporates, small to medium enterprises, local authorities, civic society and private individuals. The firm is dedicated to providing a professional service in a challenging environment and has a number of departments to carry out specialized work for clients.

Partners

  • Sara Moyo BL (UZ) LLB (UZ) Head of Conveyancing, Wills & Deceased Estates
  • Chris Kimberley BL (UZ) LLB (UZ) Intellectual Property Law
  • Gloria Ganda LLB (Rhodes) LLM (London) Head of Litigation & General Work
  • Lorraine Takaendesa LLB LLM (UNISA) Head of Intellectual Property
  • Nqobile Ndlovu LLB (UCT) MBA (Glouc) Head of Corporate & Commercial

Consultants

  • Shireen Omarshah BL (UZ) LLB (UZ) LLM (Cambridge)

Associates

  • Ruvimbo Muzonzini LLB (Oxford Brookes) Masters in Strategic Governance (MSU)
  • Bongani Matindife LLB (UNISA)
  • Carlos Hove LLB (MSU)
  • Tendai Rwodzi LLB (Fort Hare) LLM (UCT)
  • Heather Basket LLB (Wits)
  • Juliet Maunganidze LLB Hons. (UZ) BBS (UZ) MBA (UZ)

Graduate Trainees

  • Portia Siphambili LLB (UJ)

Practice Areas

  • Corporate & Commercial
  • Trade Marks, Patents and Copyright
  • Industrial Designs
  • Utility Models
  • Trusts
  • Wills & Deceased Estates
  • Conveyancing Insurance
  • Mining Law
  • Notarial Practice
  • Labour Law
  • Family Law
  • Human Rights & Constitutional Law
  • Criminal Law
  • Civil Litigation & General Work