13 Jun 2018

 The Trust Property bill that was brought to parliament by defence, justice and security minister Mr Shaw Kgathi on Tuesday has been labeled a welcome development that will among others ensure accountability by trusts and foundations.

In their debate of the bill, MPs described it as a positive step towards restoring the integrity of trusts and making sure that trust funds were used for purposes for which the entities were set up.

Francistown MP Mr Wnyter Mmolotsi expressed gladness at the law, noting how for years trusts and foundations had lacked accountability.

Mr Mmolotsi said it had become the norm for trusts accounts to be for the eyes of trustees of the trusts only, with no accountability to anyone else as to the source and use of their funds.

The arrangement, he pointed out, had made trusts and foundations fertile ground for the financing of criminal activities.

Selebi Phikwe West legislator Mr Dithapelo Keorapetse also said it was good that the law would address the issues of the misuse of trust funds, a situation that he said had become rife in recent years.

Mr Keorapetse noted further that since trusts were generally poorly regulated in many jurisdictions, they provided a door for questionable transactions that could include the funding of criminal activities.

Specially Elected MP Mr Mephato Reatile, who indicated that the bill was overdue, said it was important to start by auditing the existing trusts and foundations to ascertain the sources of the funds that they have.

Mr Reatile also highlighted why it was critical to ensure that laws passed were implemented as crafting laws and then not implementing them was not beneficial.

Contributing to the debate Major General Pius Mokgware said trusts needed to be regulated as they brought about a lot of crime as some people set up trusts with criminal intents in mind.

The Gabane-Mmankgodi MP however appealed for government to ensure that the law was not used to target certain people, but that it should be used for all if circumstances called for the law to be applied.

MP Haskings Nkaigwa of Gaborone North concurred on the need for the law to be not applied in a discriminatory manner.

He said it should be applied to all people with trusts and those willing to set up trusts.

Mr Nkaigwa hailed the law, saying it would help put in the clear the sources of trust funds.

MP Kostantinos Markus of Maun East also welcomed the bill, saying trusts had for many years not been working the way they should have been.

He said some people had used trusts and foundations for money laundering purposes as well as for self-enrichment.

MP Markus also complained of trusts accounts of law firms, some of which he noted continued to impoverish Batswana.

He said it was disappointing that even when they had been found to have acted wrongfully, punitive action was taken against the owners of such trusts accounts save for the revocation of their practicing licenses.

Mr Markus said in addition to such punishment, the lawyers in control of such accounts should also be jailed.

During his presenting of the bill earlier, MP Shaw Kgathi of Defence, Justice and Security had indicated that the law was necessary as there was currently no statutory law regulating the control of trusts in Botswana.

This, he stated, meant that there was minimal vetting and control of trusts and similar legal arrangement such as foundations in this country; adding that to continue as a country without statutory law regulating and controlling trust property provided a possible money laundering stage on which illegal activities could be disguised.

The minister noted that while most trusts and similar entities were set up for legitimate and noble causes, research by the international financial organisations such as Financial Action Task Force (FATF) indicated that corporate vehicles such as trusts could and were being used intentionally or unintentionally for money laundering and terrorist financing activities.

He said an environment such Botswana’s, where trusts and similar bodies were not subjected to accountability and transparency requirements could facilitate undesirable results, hence the need for the registration and regulation of trusts and similar entities. ENDS