Financial Crime World

Botswana’s Efforts to Combat Financial Crime: A Mixed Bag, According to Latest Assessment

A recent assessment by the global anti-money laundering watchdog, the Financial Action Task Force (FATF), has highlighted both strengths and weaknesses in Botswana’s banking regulations aimed at combating financial crime. The country received a mixed bag of ratings, with some areas showing significant progress while others require improvement.

Compliance Highlights

Botswana was found to be largely compliant (PC) in several key areas:

  • National cooperation and coordination (R.2)
  • Money laundering offense (R.3)
  • Confiscation and provisional measures (R.4)
  • Targeted financial sanctions related to terrorism and terrorist financing (R.6)
  • Powers of supervisors (R.27)

The country also showed significant progress in regulating and supervising financial institutions (R.26) and providing guidance and feedback (R.34).

Areas Requiring Improvement

However, Botswana was found to be partially compliant (PC) in several areas:

  • Reporting of suspicious transactions (R.20)
  • Tipping-Off and confidentiality (R.21)
  • Regulation and supervision of DNFBPs (R.28)
  • Financial intelligence units (R.29)
  • Powers of law enforcement and investigative authorities (R.31)
  • Cash couriers (R.32)
  • Mutual legal assistance: freezing and confiscation (R.38)

Non-Compliance and Non-Existent Areas

Botswana was found to be non-compliant (NC) or non-existent in the following areas:

  • Correspondent banking (R.13)
  • Money or value transfer services (R.14)
  • New technologies (R.15)
  • Wire transfers (R.16)
  • Reliance on third parties (R.17)
  • Transparency and beneficial ownership of legal persons (R.24)
  • International instruments (R.36)

Recommendations for Improvement

The assessment highlights the need for Botswana to improve its regulatory framework, particularly in areas related to:

  • Customer due diligence
  • Record keeping
  • Internal controls

The country must also strengthen its powers of law enforcement and investigative authorities, as well as its ability to provide guidance and feedback.

Progress and Challenges

While there are areas that require improvement, the assessment also recognizes Botswana’s efforts to implement key measures aimed at combating financial crime. The country has made significant progress in implementing risk-based approaches, national cooperation and coordination, and targeted financial sanctions.

Overall, the assessment suggests that Botswana still faces challenges in its fight against financial crime, but it is making strides in the right direction. The government must continue to work towards strengthening its regulatory framework and improving its capabilities in areas such as customer due diligence, record keeping, and internal controls.