Botswana battles dirty money greylisting in Paris

Mbongeni Mguni | Friday May 24, 2019 13:47

 

The Financial Action Task Force (FATF), a global anti-money laundering organisation founded by the world’s richest countries, placed Botswana on its greylist of high-risk countries last October, rattling the country’s competitiveness.

At the FATF’s recommendation, the European Union in February blacklisted Botswana as a money laundering and terrorism financial high-risk, further damaging the country’s investment and doing business allure. The actions came even as Botswana fine-tuned several pieces of legislation designed to enhance anti-money laundering and comply with the world-class standards for stamping out the vice.

This week, authoritative insiders told BusinessWeek the FIA-led team’s brief was to show the FATF the progress that Botswana has made in terms of the deficiencies identified before. The local team is presenting before the FATF’s International Co-operation Review Group, a panel set up to review countries’ deficiencies, monitor their progress and ensure that they do not present a risk to the international financial system.

An immediate removal from the high-risk territories is unlikely however, although favourable recommendations could be made in Paris, leading to Botswana’s restoration to good standing. “The team in Paris comprises senior officials involved in anti-money laundering in the country and their brief is to demonstrate how far Botswana has gone in addressing the concerns raised by the FATF last time. “Most of the legislation and policies aimed at addressing these issues has now been passed and we expect to hear more encouraging feedback when the team returns,” an insider told BusinessWeek. While declining to confirm that local officials are presently before the FATF, FIA director, Abraham Sethibe told BusinessWeek that Botswana had a 2020 deadline to show that it had addressed deficiencies identified.

“We submit reports to them three times a year and we also attend a face-to-face meeting where we talk about the action items we are working on, as part of the progress review,” he said.

“We have until about May or June next year to finish these items but ahead of that, we submit progress reports so that when that deadline comes, it is not as though we have been doing nothing. “A determination of whether we are removed from the high-risk countries will be made after that deadline.”

Separately, BusinessWeek is informed that the Paris mission is the first face-to-face since the October greylisting. Experts have explained that the European Union or FATF high-risk listing means any transaction emanating from the local financial sector and going international will attract heavier scrutiny from regulators and take longer to complete than normal.  Besides the attendant costs, businesses and investors, as well as their financiers, are also reluctant to associate with countries on the high-risk list.