Money laundering listing worries Business Botswana

Pauline Dikuelo | Friday March 1, 2019 13:11

FATF, a global anti-money laundering organisation founded by the world’s richest countries, placed Botswana on its list last October, while the European Union added Botswana to its money laundering black list earlier this month, on recommendation from the FATF. According to Business Botswana, the listing was untimely as the country is focused on transforming into a high-income economy.

On Wednesday, BB president Gobusamang Keebine said the country’s listing implied that legislation dealing with fraud, corruption and money laundering was weak.  “The impact on the country’s economy could be relatively wide as it is linked with the international financial system. The private sector does not know how it will unfold, but the response must be integrated and comprehensive involving all stakeholders,” he said.

According to Keebine, it is expected that institutions linked with the international financial system will be affected including banks, pension funds and the stock market. He said foreign institutions would be mandated to verify transactions with Botswana, which is likely to delay transactions and business operations.

“Access to international markets through imports and exports could be a challenge as some traders are likely to avoid trading with Botswana traders, hence reducing the profitability of business. “Botswana will likely be less attractive to investors and lose them to other countries in the region if nothing is done,” he said.

In addition he said the matter would pose significant challenges for Botswana investors in international markets where some regulators could refuse to grant Botswana investors permission to invest in their markets. Keebine urged government to speed up the processes of tightening the appropriate legislation to help reverse the negative status that the listings have put the country into.

The FATF conducts continual reviews of global compliance with Anti-Money Laundering and Combating the financing of Terrorism (AML/CFT) standards, alerting countries of deficiencies, particularly those that may affect international financial flows.

Botswana had already committed to various interventions and assured the FATF of progress.