Wednesday, November 29, 2023

Botswana could be out of notorious Money laundering list soon

Though its name recently popped up again in the list of “high-risk third countries” for money laundering and terror funding, Botswana is close to being compliant in closing the strategic deficiencies that made it prone to financial crimes. 

In 2018, the conservative Botswana government was stunned by the Financial Action Task Force (FAFT) when it was listed alongside countries that do not comply with anti-money laundering and combating of the financing of terrorism (AML/CFT). The country was later flagged by the European Union Commission in March 2019 for lacking strategic deficiencies in  AML/CFT regulations.

In May, the issue of Botswana’s grey listing made headlines again after the EU kept Botswana in the “high-risk third countries”, which is a list of 22 countries. There was immediate uproar to the latest list, forcing the Botswana government to clarify that the assessment was still based on old information, arguing that the country has now made significant progress. 

After passing a series of legislation in the last two years, Botswana requested for re-rating, with the meeting held in January 2020 where FATF International Co-operation Review Group Africa/Middle East Joint Group acknowledged Botswana’s progress towards adoption of the national AML/CFT strategy.

According to the latest ratings, Botswana has made significant progress, from being non-compliant in 23 matters to now only 6. Moreover, Botswana is partially compliant on 16 action items, up from 14 in 2017, and largely compliant on 13 requirements, an improvement from 2 recorded in three years ago. The country has full compliance to at least 6 regulations, compared to when it was zero before it passed some laws aimed at closing the strategic deficiencies. 

The FATF International Co-operation Review Group Africa/Middle East Joint Group has since decided to extend the monitoring programme to December 2020, the period within which all action items should be fully addressed.

“The Bank continues to work alongside other national authorities to respond adequately to the adverse evaluation relating to effectiveness of the national AML/CFT arrangements, and significant progress is being made towards entrenching lasting effectiveness of processes and exiting from the grey listing by the FATF,” officials from the central bank said. 


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