The Tanzanian central bank has carried out a surprise inspection of foreign exchange bureaus in Arusha, as it cracks down on suspected money laundering.
The banking regulator is also looking into black market currency trading that has been on the rise.
The operation saw the Tanzanian military pulled in to cordon on off forex bureaus with no customers allowed into the establishments.
Tanzanian newspaper The Citizen reported that some officers appeared to be working from within in what many speculated could be an audit ordered by the regulator, the Bank of Tanzania (BoT).
A statement from the regulator indicated that a six month investigation had shown that there had been an increase in foreign exchange businesses against the law as well as suspicious transactions.
In a statement to newsrooms, BoT governor Florens Luoga indicated that there was a “vast and powerful network” behind the illegal activity.
“There has been an increase in illegal foreign exchange bureaus and money laundering activities that have been conducted through foreign exchange bureaus,” Luoga said.
TAARIFA YA BENKI KUU KWA UMMA KUHUSU OPARESHENI MAALUM YA UKAGUZI NA UDHIBITI WA BIASHARA HARAMU YA FEDHA ZA KIGENI NA UKIUKAJI WA SHERIA KATIKA KUENDESHA BIASHARA YA UBADILISHAJI FEDHA YAANI BUREAU DE CHANGE. pic.twitter.com/krv7bHeZjo
— Bank of Tanzania (@BankOfTanzania) November 20, 2018
The central bank had suspended issuance of forex bureau licenses for a period of three months.
Tourists were caught out by the surprise raid, with most unable to change their money.
Arusha is a major stop for tourists heading to Mount Kilimanjaro or visiting the Serenegti.
Tanzania has 110 licensed foreign currency bureaus.
Luoga indicated that all those found to be operating illegally will have their licences revoked.
