Wednesday, May 25, 2022

EU secretly removes Botswana from high-risk list

The European Union Commission has quietly removed Botswana from its list of high-risk third countries which identifies third-country jurisdictions with strategic deficiencies in their Anti-Money Laundering/Counter Terrorist Financing regimes that pose significant threats to the financial system of the European Union.


This follows the October 2021 Plenary Session during which the Financial Action Task Force (FATF) concluded that Botswana had strengthened the effectiveness of its AML/CFT regime and addressed related technical deficiencies identified by the Commission and the FATF and removed Mauritius from its grey list.


It is not clear if the Botswana Government was not aware of this latest development prior to Minister of Finance Peggy Serame’s delivery of a budget speech in Parliament.


When delivering her maiden budget speech in Parliament last week, Serame said, “I am also pleased to report that the European Commission has determined that Botswana will be removed from the EU blacklist of high-risk third countries with regard to AML/CFT.”


A memo from Secretary-General of the European Commission, signed by Martine Deprez, Director dated 10 January 2022 and addressed to Jeppe Tranholm-Mikkelsen, Secretary-General of the Council of the European Union shows that Botswana was struck out from the grey listing alongside Bahamas, Ghana, Iraq and Mauritius.


The Commission noted that the FATF welcomed significant progress made by Botswana, Ghana and Mauritius in improving its AML/CFT regime and noted that Botswana, Ghana and Mauritius have established the legal and regulatory framework to meet the commitments in their action plans regarding the strategic deficiencies that the FATF had identified.

Therefore, the Commission’s analysis concluded, “that The Bahamas, Botswana, Ghana, Iraq and Mauritius no longer have strategic deficiencies in their AML/CFT regime considering the available information.”


According to the Commission, “The Bahamas, Botswana, Ghana, Iraq and Mauritius have strengthened the effectiveness of their AML/CFT regime,” adding that, “ These measures are sufficiently comprehensive and meet the necessary requirements to consider that strategic deficiencies identified under article 9 of the Directive (EU) 2015/849 have been removed.”
The document says that, in accordance with the latest relevant information, the Commission’s assessment concluded that Burkina Faso, Cayman Islands, Haiti, Jordan, Mali, Morocco, the Philippines, Senegal, and South Sudan should be considered as third-country jurisdictions which have strategic deficiencies in their AML/CFT regime that pose significant threats to the financial system of the Union, in accordance with the criteria set out in Article 9 of Directive (EU) 2015/849.


It is noted that these countries have provided written high-level political commitment to address the identified deficiencies and have developed action plans with the FATF.
Serame said in her budget speech that Botswana had to work very hard to address these issues, but eventually the necessary laws, amendments and reforms were implemented and the FATF grey listing was lifted in October 2021.

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