Monday, December 4, 2023

FIA gets more teeth as Matambo amends Banking Act

The Financial Intelligence Agency (FIA) is expected to grow more teeth as soon as parliament approves the amendment of the Banking Act.

Parliament this week debated the proposed amendments as presented by Finance Minister Kenneth Matambo for a second reading.

Matambo told Parliament that the amendment of the Banking Act is necessary to address the issues of dual reporting of suspicious transactions between Bank of Botswana (BoB) and FIA and the duty of confidentiality of a banker to the customer.

FIA was established in 2009 with a mandate to request, receive, and analyze suspicious financial transactions. This however, according to Matambo, resulted in an overlap with the functions of the central Bank – Bank of Botswana. At the same time the current laws impedes the FIA from carrying out its work due to the bank secrecy provision.

As a result, Matambo submitted to parliament that the amendment of section 21 of the ACT is meant to remove the dual reporting between the two agencies.  Matambo further said that Clause 3 amends the Act by deleting section 21(4) and amending section 21(5), to ensure that suspicious transactions are only reported to FIA and not BOB. This will also mean that no penalties are levied by the Central Bank for non-reporting of suspicious transactions as this is now the function of FIA.

At the same time, the anti money laundering agency is expected to bite more as the proposed changes to the Banking law would see it listed amongst the to include the FIA as one of the entities allowed to request customer information from a bank.

Matambo also proposed that the Banking Act be amended that clause 2 of the Bill amends section 2 of the Act by including new definitions such as “Agency”, “investigatory authority” and “money laundering”. He added that this is intended to align the Banking Act with the Financial Intelligence Act and the Proceeds and Instruments of Crime Act.

“The proposed amendments will have the effect of enhancing confidence in Botswana’s financial system,” Matambo said.

Parliament also debated Section 43 of the ACT which is also up for amendment by inserting definitions for correspondent banking services, physical presence and shell bank.


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