Botswana’s Battle Against Financial Crimes: A Look at the Country’s Anti-Money Laundering and Counter-Terrorist Financing Measures

Botswana, a landlocked country in Southern Africa, is making strides to enhance its anti-money laundering (AML) and counter-terrorist financing (CTF) measures. In a recently released Mutual Evaluation Report by the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG), the organization assessed Botswana’s compliance with the Financial Action Task Force (FATF) recommendations.

Botswana’s Commitment to AML/CFT Measures

Consistent with its membership in ESAAMLG and a signatory to the FATF, Botswana has committed to implementing and enforcing the international FATF standards against money laundering and terrorist financing. The report provides an analysis of Botswana’s AML/CFT measures, pointing out areas for improvement.

Key Findings

1. Progress but room for improvement: Botswana has made progress in its AML/CTF regime, but there is still a need for improvement in several areas.
2. Improving coordination and cooperation: While domestic coordination and cooperation among stakeholders are generally good, they can be better with a shared understanding of the country’s ML/TF risks and signed Memorandums of Understanding (MoUs) among competent authorities.
3. Deficiencies in Botswana’s legal framework: Botswana’s legal framework for dealing with money laundering has significant deficiencies, such as a limited scope of predicate offenses and the absence of essential elements of the money laundering offense.
4. Variations in capacity and understanding: Competent authorities have varied capacity and understanding of their AML/CFT responsibilities. For instance, the Directorate on Corruption and Economic Crimes (DCEC) has commenced investigating ML cases but needs more capacity, while the Financial Intelligence Agency (FIA) has sufficient resources but requires capacity to carry out its supervisory role.
5. Deficiencies in Botswana’s TF legal framework: Botswana’s TF legal framework also has major deficiencies, primarily due to non-criminalization of individual terrorists, penalties not being proportionate, and the lack of coverage for legal persons.
6. Awareness needed for NPOs: The authorities have not determined which non-profit organizations (NPOs) in Botswana could be vulnerable to TF risks or carried out any awareness in this sector.

Areas for Improvement

1. Implementing AML/CFT measures on a risk-sensitive basis: Botswana is currently conducting its first National Risk Assessment (NRA) to develop a National Strategy for implementing AML/CFT measures.
2. Strengthening legal framework: Botswana should focus on improving its legal framework to provide for a requirement to identify and verify the identity of legal persons and legal arrangements, as well as obtaining and retaining information on beneficial ownership.
3. Collaborating to improve financial intelligence usage: Competent authorities must collaborate to improve the usage of financial intelligence by Botswana’s law enforcement agencies (LEAs) to initiate or support ML investigations.

Conclusion

Botswana has taken steps to strengthen its AML/CFT framework, but there are still significant areas for improvement. The country must continue to invest in building capacity, improving coordination among stakeholders, and updating its legal framework to effectively address ML and TF risks.