02 Feb 2022

Parliament has passed a bill amending the Companies Act to make it compliant with the Financial Action Task Force (FATF) regulations.

The Companies Amendment Bill was presented by the Assistant Minister of Agricultural Development and Food Security, Mr Molebatsi Molebatsi on behalf of the Minister of Investment, Trade and Industry in Parliament on Tuesday.

Mr Molebatsi said the amendment required all companies to have a constitution and beneficiaries to be registered.

He explained that the requirements would however affect ease of business, adding however failure to comply would lead the country to be grey listed by the FATF which could have detrimental effects on trade negotiations.

The assistant minister said all operational businesses would be required to be compliant with the new registration changes in 12 months.

He noted that companies were previously required to have a constitution, but that was set aside in a quest to ease doing business, hence the requirement  was not new.

Mr Molebatsi said each business, regardless of size, must have a constitution, traceable financial records, ownership and governance of the business must also be well defined.

He said turnaround time of registering a business would be affected by the approved additions. However, he was positive that the business community would respond positively to the required compliance standards.

Mr Molebatsi said the primary issue of concern was to regulate use of funds, identify source of origin and recipients as well  cash flows.

Debating the Bill, Gaborone North Member of Parliament, Mr Mpho Balopi said it was important for the country to implement the amendments in order to be trustworthy and open up to opportunities on doing business in the global market.

He said the country must implement laws that would guard against criminal activities relating to financial transactions.

Mr Balopi said even though, small businesses were the engine driving the economy, they were bound to be negatively affected by the proposed changes to the Companies Act.

However, Mr Balopi said such businesses were equally targeted by terrorists’ organisations and were used for money laundering, adding that despite the challenges they were bound to face, they must comply.

For his part, Lobatse MP, Dr Thapelo Matsheka said the assessment of laws was controlled by the developed nations, who were drivers of the economy and therefore resisting the proposed change was equal to refusing engaging in a business deal with them. He said the world was being integrated and therefore, the country must comply.

Dr Matsheka said sanctions would be easily imposed on those failing to comply, adding that integration was a weapon that the country must use in international trade. The Lobatse legislator also concurred that the economy would be challenged as some small businesses would be affected by the requirements. Ends