Financial Crime World

Financial Crime Risk Management in Botswana: National Risk Assessment AML/CFT Underway

Botswana, a member of the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), is committed to implementing international anti-money laundering and combating the financing of terrorism (AML/CFT) standards. As part of this effort, the country has embarked on a National Risk Assessment (NRA) project to identify, assess, and understand money laundering and terrorist financing risks within its borders.

A Critical Component of Botswana’s AML/CFT Regime

The NRA is a critical component of Botswana’s AML/CFT regime as it enables the government to apply a risk-based approach (RBA) in allocating resources effectively across the AML/CFT system. The RBA ensures that measures to prevent or mitigate money laundering and terrorist financing are proportionate to the identified risks.

Project Components

The NRA project consists of eight modules:

  • Threat Assessment: To identify potential threats to Botswana’s financial system
  • National Vulnerability: To assess the country’s vulnerability to money laundering and terrorist financing
  • Banking Sector Vulnerability: To evaluate the risk of money laundering and terrorist financing in the banking sector
  • Securities Sector Vulnerability: To assess the risk of money laundering and terrorist financing in the securities sector
  • Insurance Sector Vulnerability: To evaluate the risk of money laundering and terrorist financing in the insurance sector
  • Other Financial Institutions Vulnerability: To assess the risk of money laundering and terrorist financing in other financial institutions
  • Designated Non-Financial Businesses and Professions (DNFBPs) Vulnerability: To evaluate the risk of money laundering and terrorist financing in DNFBPs
  • Financial Inclusion Products Risk Assessment: To assess the risk of money laundering and terrorist financing associated with financial inclusion products

Project Timeline

The project commenced in March 2015 and is expected to be completed by the end of the 2016/17 fiscal year.

Objectives and Outcomes

Botswana’s NRA project aims to provide a comprehensive understanding of money laundering and terrorist financing risks within the country, enabling the government to develop targeted strategies for mitigating these risks. The project’s outcome will also contribute to Botswana’s efforts to comply with regional and international AML/CFT standards.

International Cooperation and Best Practices

The NRA project’s objectives are in line with the Financial Action Task Force (FATF) recommendations, which emphasize the importance of a risk-based approach in preventing and combating money laundering and terrorist financing. By implementing the NRA project, Botswana is demonstrating its commitment to international cooperation and best practices in AML/CFT regulation.

Collaboration and Success

The success of Botswana’s NRA project will depend on the effective collaboration between government agencies, financial institutions, and other stakeholders. The project’s outcome is expected to provide valuable insights into money laundering and terrorist financing risks in Botswana, enabling the government to develop targeted strategies for mitigating these risks and ensuring a safer financial environment for all citizens.