Financial Crime World

Botswana’s Strides and Challenges in Combating Money Laundering and Terrorist Financing

Botswana, a landlocked country in Southern Africa, is making significant strides to strengthen its defenses against money laundering (ML) and terrorist financing (TF) activities. In this article, we will explore Botswana’s progress, as outlined in the 2017 Second Round Mutual Evaluation Report by the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG).

Botswana’s Evaluation by ESAAMLG

ESAAMLG, an organization established to prevent and combat ML and TF in the Eastern and Southern African region, conducted an evaluation of Botswana’s financial crimes prevention policies. The report, adopted by the ESAAMLG Council of Ministers in May 2017, highlights the country’s achievements and identifies areas for improvement.

Key Findings

Some of the key findings of the report include Botswana’s general understanding and commitment to anti-money laundering and counter-terrorist financing measures. However, the country’s competent authorities are still in the process of building capacity and understanding their responsibilities.

Domestic Coordination and Cooperation

Botswana’s domestic coordination and cooperation have been relatively good. However, there is room for improvement with regard to understanding shared ML/TF risks and implementing agreements to facilitate information sharing.

Botswana’s legal framework has significant deficiencies in areas such as the definition of predicate offenses and the absence of essential elements in the offense of ML. There’s also inconsistency in penalty provisions and a need for more resources to investigate and prosecute these crimes effectively.

Competent Authorities

Botswana’s authorities, such as the Botswana Police Service, Botswana Unified Revenue Services, Botswana Institute of Chartered Accountants, and the Directorate on Corruption and Economic Crimes, have mixed experiences and varying levels of understanding regarding their roles and responsibilities, as well as ML/TF risks.

The report indicates that Botswana’s authorities have made progress in confiscating proceeds of crime but implementation leaves much to be desired due to a focus on investigating and prosecuting predicate offenses. Botswana’s TF legal framework also has substantial weaknesses.

Vulnerable Non-Profit Organizations and Risk Assessment

Botswana has yet to identify vulnerable non-profit organizations and provide necessary measures to mitigate potential TF risks. Additionally, Botswana is in the process of conducting its first National Risk Assessment, which will facilitate the implementation of AML/CFT measures based on a risk-sensitive basis.

Reporting and Usage of Financial Intelligence

Botswana has had limited success in receiving reports from financial institutions, and usage of financial intelligence by relevant authorities is low. Reported wildlife trafficking cases are currently considered a low risk due to increased cooperation and enforcement efforts within the Southern African Development Community (SADC) region.

Recommendations for Improvement

The recommendations for improvement include assessing risks and applying a risk-based approach, enhancing coordination and cooperation, clarifying ML offenses and penalty provisions, improving understanding and capacities of authorities, implementing a risk-based approach to AML/CFT obligations, and improving transparency and beneficial ownership requirements.

With continued efforts and the implementation of these recommendations, Botswana can further bolster its defenses against ML and TF and ensure a safer financial environment for its citizens and its international partners.