The Financial Intelligence Agency is sleeping on the job while Botswana is being used to launder hundreds of millions of Pula mostly from Zimbabwe ÔÇô Sunday Standard investigations have revealed. More than P70 million Pula in cash was smuggled into Botswana in three months and laundered through Stanbic Botswana and Capital Bank. Sunday Standard can reveal that Stanbic Bank reported the suspicious transactions to the Financial Intelligence Agency (FIA) which has so far not taken any action. Sources close to the issue reveal that tempers ran high Friday at a meeting called by Bank of Botswana Governor, Moses Pelaelo to discuss the issue with FIA and banks’ managing directors. This follows complaints by Zimbabwean authourities that three Zimbabwean investors currently on the run smuggled more than P70 billion in cash into Botswana between January and April 2017 and deposited the black money with Stanbic Bank and Capital Bank in Botswana.
According to information presented by Zimbabwean authourities, between January 14th and April 7th 2017, one of the suspects Delny Deanna Ashley Davies and her aides crossed into Botswana with large amounts of cash and deposited a total of US$ 5, 819 106, R 500 100 Euro 39 500 into her three foreign accounts with Stanbic Bank Botswana, namely Stanbic Bank (RSA Rand) Account number 906001687994, Stanbic Bank ( Euro) Account number 906002320062 and Stanbic Bank (USD) Account number 90600168000 and 9060002620438 without the approval of the reserve bank of Zimbabwe.
Another suspect, Farid Shahadat, also wanted by Zimbabwean authourities is reported to have between February 2nd and April 11 this year crossed into Botswana with cash amounting to USD 1 197080 which he also deposited into his three USD accounts with Stanbic Bank Botswana. The accounts he deposited the money into are listed as 906000257 Stanbic Bank, 9060002572504 Stanbic Bank and Capital Bank000370 300 8498 without the approval of the reserve bank in Zimbabwe. Shahadat is the Director of Yakuts Marketing a gold mining and milling company in Zimbabwe. The third suspect Ryan Gregory Joseph is reported to have on 12th and 13th April deposited a total of USD$ 331 700 cash into his USD account number 906 000 162 9598 with Stanbic Bank Botswana. The trio is suspected ho having smuggled a cash amounting to USD$7, 3 million (P74 million) into Botswana in four months. Sethibe on Saturday morning would neither deny nor confirm reports of what is believed to be one of FIA’s biggest investigations so far. Stanbic Botswana Managing Director, Leina Gabarane confirmed on Saturday that they have 300 non resident accounts and eight are problematic. The eight which are problematic have been reported to FIA for investigation. The accounts by three Zimbabwean businesspeople who have smuggled more than P70 million into Botswana in four months are believed to be among the eight which Stanbic has reported to FIA.
Gabarane explained that when a client walks into the bank to make a suspicious transaction, they are required by the law to proceed with the transaction and then report it to FIA within the prescribed period, “and Stanbic Bank did just that.” He told Sunday Standard that “if nothing is done after I have reported the transaction; I cannot stop the client from taking the money because I do not have a court order.” Capital Bank could not be reached for comments. The P70 million that was laundered through Botswana banks between January and April is believed to be the tip of an iceberg in the flow of illicit money from Zimbabwe to Botswana. Zimbabwean Reserve Bank records show that business tycoons have smuggled USD$ 3 billion (about P30 billion) between 2015 and 2017 “mainly to Botswana, Mauritius and the far east.” Botswana is believed to be used mainly as a Laundromat and conduit for the black money because of its lax financial regulations.
Zimbabwe has a small economy, whose Gross Domestic Product (GDP) is under US$10 billion.
Its 2016 National Budget is under US$5 billion. Annually, the country has been realising foreign direct investment (FDI) at the scale of about US$400 million.
Now if US$2 billion is lost annually, it means money is flying out of the country faster than it’s coming in.
This, in itself, helps explain the liquidity crisis confronting the country’s economy. Most of the money is reported to be cleaned through Botswana banks before being transferred to other international tax havens. This explains huge questionable transfers out of Botswana. FIA boss, Dr Sethibe revealed two weeks ago that billions are laundered out of Botswana every year. This confirmed recent findings by Global Financial Integrity (GFI). The authors of the GIF survey report, Dev Kar and Joseph Spangers, say the findings underscore the urgency with which policymakers should address illicit financial flows. The survey carried out by Global Financial Integrity (GFI) states that Botswana might have lost approximately US$20 billion About P200 billion between the years 2004 to 2013, through illicit money transfers. The research tracks the amount of illegal capital flowing out of 151 different developing and emerging countries over the 10-year period from 2004 through 2013, and ranks the countries by the volume of illicit outflows. Botswana ranks 66th in the entire world with an average of U.S 1,368m. In the year 2004, about $13.7 billion IFFs were recorded in Botswana with about $1.1 billion recorded in 2004 and US$1.2 billion in 2013. On trade mis invoicing outflows, Botswana recorded a cumulative $12.8 billion.
The reports states that IFFs (illicit financial flows) mostly originated from corruption, illegal resource exploitation and tax evasion, which include smuggling and transfer mispricing. As a percentage of GDP, Sub-Saharan Africa suffered the biggest loss of illicit capital. Illicit outflows from the region averaged 6.1 percent of GDP annually. Globally, illicit financial outflows averaged 4.0 percent of GDP. Botswana has in the past clashed with the United States government following a decision by the Botswana government to cover up the extent of money laundering in the country. This accounts for most of the billions of Paula that have been laundered out of Botswana.