After enacting the Financial Intelligence Act [Cap 09:07] (“the Act”) in 2009, Parliament passed the Financial Intelligence (Amendment) Act No. 7 of 2018 (“the Amendment Act”) which came into force on 29 June 2018. The purpose of the Amendment Act is to harmonise Botswana’s financial intelligence legislation with the Financial Action Task Force (FATF) recommendations and international standards, in the fight against money laundering, financing of terrorism and financing of proliferation of arms of war.
The Amendment Act contains the following key provisions:
- the provisions of the Act take precedence in the event that there is any conflict or inconsistency between the provisions of the Act and any other law on anti-money laundering, counter-financing of an act of terrorism or counter-financing of proliferation of arms of war;
- it defines what is termed high risk business and high-risk jurisdiction and obliges a specified party to monitor and report on complex transactions or unusual pattern of transactions which have no apparent economic or lawful purposes especially on business relationships formed in a high-risk jurisdiction and transactions for high risk businesses;
- financial offence has been redefined to cover financing of proliferation of arms of war or NBC weapon;
- the qualifications and experience of the Director General of the Financial Intelligence Agency (“Director General”) are set out and the appointing authority is now the President;
- the qualifications for compliance officers are now set out and there is an obligation to conduct ongoing due diligence and periodic review of accounts to maintain current information and records relating to the customer and beneficial owners;
- any person responsible for ensuring compliance by a specified party or accountable institution (such as a compliance officer) commits an offence if they negligently fail to exercise measures reasonable to ensure compliance and are liable to a fine not exceeding BWP250,000.00 or a term of 5 years imprisonment or both;
- a conveyancer and a notary public have been added to the list of specified party with the responsibility to report suspicious transactions;
- a specified party such as an accountant or attorney and accountable institutions such as banks are obliged to not proceed with transactions where the Director General directs in writing that he has reasonable grounds to suspect that a transaction may involve the commission of a financial offence. Once directed, the specified party or accountable institution shall monitor the account and submit a monitoring report to FIA within 10 working days; and
- the punishment and fines meted for offences created under the Act have been generally increased. The ranking of the provisions of the Act over other anti-money laundering legislation in the event of conflict or inconsistency shows how topical the curbing of money laundering and financial crimes have become. Admittedly, the Act will not on its own end money laundering and other financial crimes, but it is commendable that Botswana took a step towards aligning her financial intelligence legislation with international standards by amending the Financial Intelligence Act [Cap 09:07].
For further information contact Thuto Senwedi on 391 2397 or email thuto@bookbinderlaw.co.bw.