Botswana assesses money laundering risk
Isaac Pinielo | Friday March 6, 2015 13:02
The risk assessment is an international requirement to combat money laundering and the financing of terrorism. Countries are required to identify, assess and understand the money laundering and terrorist financing risks that they face in their jurisdiction.
Launching the project in Gaborone on Wednesday, Permanent Secretary in the Ministry of Finance and Development Planning, Solomon Sekwakwa said this was a huge milestone for the country’s financial sector as it marked the beginning of the first money laundering and terrorist financing national risk assessment in Botswana. He further said the assessment, done with help from the World Bank, would help government understand the sources and methods of money laundering in Botswana and to identify any vulnerabilities and weaknesses in the systems.
The risk assessment is a process that entails identification and evaluation of the money laundering and terrorist financing risks of a country and analysing the main sources and drivers of the risks. Sekwakwa also said the findings of the project should put the country in a position to develop effective and risk-based policies and actions and allocate the available resources in the most efficient way to eliminate, control and mitigate the identified risks.
“Efforts to combat money laundering by the international community gave birth to the Financial Action Task Force (FATF), which is an independent inter-governmental body that develops and promotes policies to protect global financial systems against money laundering and financing of terrorism,” he explained. He added that the risk assessment project was critical and urgent for Botswana as it was meant to address recommendations of the Financial Action Task Force (FATF). “The risk assessment project will also address the findings by the World Bank Mutual Evaluation of 2007, which recommended Botswana to undertake an in-depth review of the money laundering and terrorism financing risks and vulnerabilities,” he stated. The permanent secretary warned that money laundering and terrorist financing could have dire social, economic and political repercussions for economies, if left unchecked.
He revealed that it was for this reason that the government developed the country’s anti-money laundering and counter terrorist financing regime. “The regime is reviewed on a continuous basis for improvement and for alignment with international standards. To give an example, last year Parliament approved the Anti-Terrorism, the Anti-Human Trafficking and the Proceeds and Instruments of Crime Act legislations,” he said.
He also said these legislations together with the Financial Intelligence Act and other supporting legislations are the basis for the country’s anti-money laundering and counter terrorist financing framework. Sekwakwa added that the results of the national risk assessment would inform the country’s policy makers of where to tighten the current anti-money laundering and terrorist financing regime, and properly channel resources to mitigate such risk based on a risk-based approach. “This will make Botswana a more secure country in terms of money laundering and terrorist financing, and consequently a centre of attraction for foreign direct investment,” he said.