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BY CEDRIC SWANKA
Botswana has made four bill amendments this year to comply with international laws and improve business competitiveness.
This past week, Parliament passed bills which introduced definitive terms which will change company ownership and business registration in Botswana as well as contribute to counter measures in money laundering and counter terrorism presented by the Minister of Trade and Industry.
The Companies Act and Registration of Business Names Act to make them more consistent with the Financial Action Task Force (FATF) Standards. Amendment of both Companies Act and Registration of Business Names Act were commenced on 3rd June 2019 and among other things introduced was the requirement that a company should disclose its beneficial owners in order to ensure that companies are not used as a vehicle for money laundering or terrorist financing.
Minister of Trade and Investment (MITI) Bogolo Kenewendo when presenting the Companies Amendment Bill number 20 of 2019 and Registration of Business Names Amendment Bill number 22 of 2019, said “Following the commencement of the Act, it was subjected to an assessment by the East and Southern African Anti-Money laundering Group (ESAAMLG), Financial Action Task Force (FATF) and the Global Forum on Transparency and Exchange of Information for Tax Purposes.”
In their assessment the three organisations are said to have found the definition of the term “beneficial owner” as used in both the Companies Registration Act and Registration of Business Names Act not being entirely consistent with FATF definition and deficient in that it does not include a natural person who controls a company or person who exercises effective control over a company.
Therefore the Minister of MITI`s objective with the Amendment of both Bills was to amend the definition of the term “beneficial owner” to make the definition consistent with FATF standards.
Minister Kenewendo shared that “the assessment by ESAAMLG and the FATF found that the sanctions as prescribed in the Companies do not comply with FATF Standards in that sanctions for failure to comply with the obligations in the Act are not proportionate and dissuasive.”
In addition to the amendment of both the Companies Registration Act and Registration of Business Names Act, the Minister sought to increase the penalties under the Companies Amendment Bill to make them proportionate and dissuasive.
Junior Minister of Youth Empowerment, Sport and Culture Development Phillip Makgalemele concurred with the motion and said “it is very important Mr Speaker that we comply with the dictates of ESAAMLG, especially when we have such a progressive law in place and therefore if there are some loopholes, they have to be closed because if we make these progressive laws and then we do not comply one way or the other, then young people will be frustrated in the long run.”
The Financial Action Task Force is a global anti-money laundering watchdog that identifies jurisdictions with weak measures to combat money laundering and terrorist financing (AML/CFT).