Saturday, July 13, 2024

FIA‘s side of the grey listing


The country’s banking facility is running the risk of being negatively affected as foreign banks may decide to apply enhanced due diligence when dealing with transaction as a result of Botswana being grey listed for deficiencies on Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT).

Botswana was assessed for compliance with the Financial Action Task Force’s (FATF) Recommendations in 2016 by assessors from the Eastern and Southern Africa Anti Money Laundering Group (ESAAMLG).

Financial Intelligence Agency (FIA) Director Abraham Sethibe says it is important to realize that there are possibilities and would, should they occur, be unintended consequences for a grey listed country. He further stated that assessor’s evaluated the effectiveness of the country’s prevailing AML/CFT framework in order to identify the extent to which the Botswana AML/CFT system is achieving the intended objectives of the FATF standards.

“Reported is that Botswana has not made tangible and positive progress towards increasing effectiveness of the AM/CFT regime,” said Sethibe.

He further stated that following the results of the mutual evaluation the country was placed under one year observation period by the FATF in which it was to improve its technical compliance and effective implementation of its AML/CFT regime. He said in October 2018, at the FATF meeting held in Paris the International Cooperation Review Group (ICRG) (an organ of the FATF responsible for identifying and working with Jurisdictions where significant AML/CFT deficiencies have been identified to remedy the deficiencies) presented the post observation report of Botswana along with its recommendations to the FATF Plenary which among others included the a recommendation that a public statement about Botswana’s state of AML/CFT system.

Sethibe stated that Botswana government has adopted the action plan for implementation and wrote a letter to the FATF committing at a high level to address all AML/CFT strategic deficiencies identified in the action plan within the given period. He spoke of the publication of the public statement and the referral to the ICRG might imply that a country is a high risk jurisdiction, adding that in essence might not be the case.

“Besides this likely perception, the ICRG process is a costly excise and therefore has budgetary implications. The correspondent banking facility might be affected as foreign banks may decide to apply enhanced due diligence when dealing with transaction from a listed country,” said Sethibe.

Quizzed further on the progress made, he said the AML/CFT laws were prioritized at both the drafting stage and for tabling in Parliament. He added that a total of 25 bills were passed by Parliament, as at the end of June 2018 to address the identified deficiencies. He said this was extra-ordinary action on the part of the Botswana government mainly to ensure compliance with the FATF recommendations.

Sethibe stated that the July/August meeting of Parliament was convened a month earlier to allow the enactment of the remaining 17 of the 25 AML/CFT Bills.  He said almost all pieces of legislation enacted this year have been commenced and are being implemented.


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