Sunday, May 19, 2024

Britain smells dirt in Botswana money

Britain has included Botswana to its money laundering watchlist.

No. 10 Downing Street warns firms to put special procedures in place when dealing with Gaborone entities and clients.

The HM Treasury this week published an updated ‘advisory notice’ on money laundering and terrorist financing controls in high-risk jurisdictions which saw Botswana appearing in that list.

The HM Treasury is the British government department responsible for developing and executing the government’s public finance policy and economic policy.

The HM Treasury says: “In any business relationship or transaction involving persons from the Botswana…appropriate actions are to be adopted to minimise the associated risks, which may include enhanced due diligence measure in high risk situations.”

The decision by Botswana’s former coloniser follows the recommendations of the International Financial Action Task Force (IFAF) which the European Union (EU) used to include Botswana in a draft list of jurisdictions that pose a high risk of money laundering. Botswana has since insisted it should be removed from the list arguing that it has made political commitment to address “strategic deficiencies” that pose a risk to the international financial system.

The advisory notice states that the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017 (MLRs 2017) require the UK regulated sector to apply enhanced customer due diligence to high-risk countries.

It says: “Since October 2018, when Botswana made a high-level political commitment to work with the FATF and the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) to strengthen the effectiveness of its AML/CFT  (Anti-Money Laundering and Countering Financing of Terrorism) regime and address any related technical deficiencies, Botswana has taken steps towards improving its AML/CFT regime, including by commencing online Suspicious Transaction Reporting (STR) filing by some types of reporting entities.”

The British Government says “Botswana should continue to work on implementing its action plan to address its strategic deficiencies,”

This could be achieved by among others “assessing the risks associated with…legal arrangements and Non Profit Organisations (NPOs), and developing and implementing a risk-based comprehensive national AML/CFT strategy.”

The advisory notice also informed Botswana to   develop and implement risk-based AML/CFT supervisory manuals as well as improving its analysis and dissemination of financial intelligence by the FIU, and enhancing the use of financial intelligence among the relevant law enforcement agencies.

The UK also advised Botswana to develop and implement CFT strategy, and ensuring the Terrorism Financing (TF) investigation capacity of the law enforcement agencies and ensure that the implementation without delay of targeted financial sanctions measures related to terrorist financing and proliferation financing. Botswana was also advised to apply a risk-based approach to monitoring non-profit organisations.

The UK also warned its financial firms to “Take appropriate actions to minimise the associated risks, which may include enhanced due diligence measures in high risk” as well as “Consider as high risk and apply enhanced due diligence measures in accordance with the risks” when dealing with Botswana.

Other countries included in the same watchlist by the British Government are the Bahamas, Cambodia, Ethiopia, Ghana, Pakistan, Serbia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia and Yemen.


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