Graft-busting agency fails to take off

MBONGENI MGUNI
Staff Writer | Thursday February 11, 2010 00:00

 

The fraud-busting agency would have been capable of prescribing fines of up to P1 million for organisations and individuals responsible for fraud and other financial crimes, either by commission or omission. It would also have referred cases to the Botswana Police Service and the Directorate on Corruption and Economic Crime, while working in tandem with a spectrum of judiciary, legal and financial bodies.

On Monday, Finance and Development Minister, Kenneth Matambo announced that plans for the Agency had been suspended, owing to the diminished national purse, which took a knock from last year's recession and this year's slow recovery.

'Following the adoption of the Financial Intelligence Act in April 2009, Government will establish a Financial Intelligence Agency under my Ministry.

'Due to budgetary constraints, establishment of the Agency has been suspended until such time that resources permit,' he said.

With the move, the Agency joins the collection of projects and plans which are expected to fall by the way side as government strategically prioritises its P12.2 billion development budget.

The news will come as a blow to advocates of financial transparency and accountability who had hoped the Agency would root out acts of impropriety in private transactions. Recently, the Bank Adjudicator revealed that of the 140 complaints attended to last year, between 10 and 15 percent were related to fraud, indicating the growth of illegal practices in the sector.

According to the Act passed last April, the Agency would receive, analyse and disseminate suspicious financial transactions to investigating authorities such as the Botswana Police Service and the Directorate on Corruption and Economic Crime.

The Agency was expected to strengthen various legislation dealing with money laundering such as the Proceeds of Serious Crime Act.

The Agency was expected to establish a National Financial Intelligence Committee which would assess the effectiveness of policies and measures to combat financial crime.

This Committee would also formulate policies to protect Botswana's reputation with respect to suppression of financial crime. Under the Act, financial institutions would have been mandated with identifying customers or clients and keeping their records.

The banks would also have been required, under the Act, to develop internal rules, policies and procedures to protect their systems from financial offences.

The Act also prescribes punishment on specific parties for failing to report suspicious cash transactions.