07 Aug 2019

 Proposed amendments to the Financial Intelligence Bill will enable Botswana to deal with issues of money laundering and financing of terrorism, says Minister of Finance and Economic Development, Mr Kenneth Matambo.

When presenting the bill in Parliament this week, Mr Matambo said it would enhance the integrity of Botswana’s financial sector. 

He explained that the purpose of the bill was to re-enact the Financial Intelligence Act so that there could only be one act that incorporates the original 2009 Act, the 2018 (Amendment) Act and the amendments as currently proposed.

The proposed bill, he said, would address deficiencies in the re-rating exercise carried out by the Eastern and Southern Africa Anti Money Laundering Group (ESAAMLG) early this year.

The minister noted that Botswana would close identified gaps and harmonise its financial intelligence legislation with international standards; in particular, the Financial Action Task Force recommendations.

The bill, Mr Matambo said, sought to amend the definition of ‘beneficial owner’ and ‘property’ to make them consistent with Financial Action Task Force standards and the Proceeds and Instruments of Crime Act.

It also provided for the Financial Intelligence Agency to continue as the central agency responsible for requesting, receiving, analysing and disseminating financial information to an investigatory authority, supervisory authority or comparable body outside Botswana.

 He also said the bill shall make provision for specified parties to conduct risk assessment and document the risk assessment, on new products, practices, technologies and delivery mechanisms prior to their launch or use.

In relation to group-wide programmes, Mr Matambo said the bill shall provide for specified parties to maintain controls and procedures for protection of personal data, sharing of information required for customer due diligence and prevention of financial offences.

In addition, he noted that there shall be provision for specified parties to apply Botswana measures on a foreign branch, for countering commission of financial offences in a foreign country, if the law of the foreign country permits.

The bill further provided for the requirement to conduct customer due diligence in accordance with risk assessment.

Mr Matambo noted that the bill provided for factors that the specified party must take into account when assessing the level of risk for each particular case.

He further highlighted that the bill made it clearer that where the customer due diligence process was likely to tip off a customer, then the process must be stopped and a suspicious transaction be reported.

Furthermore, he indicated that the bill made provision for Botswana to apply counter measures on another jurisdiction as a result of the risk of money laundering or terrorist financing activities when called to do so by the Financial Action Task Force, or independently.

The bill, Mr Matambo, said provided for a specified party to establish whether a prospective customer or a beneficial owner was a prominent or influential person (PIP). In relation to cross border correspondent banking, he noted that the bill provided for a specified party to obtain information from credible sources in determining the reputation of a respondent bank.

The minister noted that his ministry worked with various stakeholders dealing with anti-money laundering/counter financing of terrorism matters such as Financial Intelligence Agency, Bank of Botswana and the Non-Bank Financial Institutions Regulatory Authority to come up with proposed amendments to the Financial Intelligence Act.

When contributing to the bill, Member of Parliament for Serowe South, Dr Pelonomi Venson-Moitoi said this was an important piece of legislation, which would continue to endorse Botswana as a country that respecte the rule of law. 

She said Botswana was part of the international community and therefore needed to conform to such international standards.

Specially Elected MP, Ms Bogolo Kenewendo, said the bill spoke to the needs and processes of providing transparency in the financial sector. 

In addition, she said, she expressed hope that the Financial Intelligence Agency would be a model agency that will share information adequately on how the financial sector operates and the credibility of the financial and investment sector in Botswana.

Ms Kenewendo indicated that she was impressed that there will be risk assessment on new products, saying this will avert any issues that can arise and make Botswana blacklisted.

The effects of Botswana being blacklisted by the EU on the Foreign Direct Investment (FDI) promotion drive had taken the country steps back.

She said they had been challenged to participate and sign in different statements that assure transparency and credibility in the financial sector. ENDS