Financial Intelligence Agency takes off

MBONGENI MGUNI
Staff Writer | Tuesday September 21, 2010 00:00

Supported by Ministry of Finance and Development Planning officials, the FIA's five experts are presently head-hunting a director, formulating an 'extensive' work plan and preparing to study local trends in money laundering, financial crime and other vices targeted by the FIA Act.

Yesterday, Assistant Finance and Development Planning Minister, Charles Tibone, said government's intentions of 'massively' kick-starting the Agency were inhibited by budgetary constraints. Earlier this year, Finance Minister, Kenneth Matambo, announced that the FIA's development would be suspended 'until such time that resources permit.' However, government, supported by the US Department of Treasury, has since rescinded that position.

'We wanted it to start more massively but because of the global recession, we had to reduce the recruitment of personnel for the Agency. As a result, the Agency will work with Ministry staff while looking for more permanent staff.

'The Agency has started working and we have attached someone from the Ministry to work with the US adviser,' he said.

Yesterday, Tibone and the US Ambassador to Botswana, Stephen Nolan, signed a Memorandum of Understanding outlining the terms of technical cooperation between the two countries in terms of fully setting the FIA in motion.

Deputy Secretary for Economic and Financial Policy Division, Ellen Richard-Madisa explained that the US Department of Treasury adviser, Jim Day, would work over the next two years to bring the FIA to full operations.

Day is fresh from Lesotho where he was involved in the establishment of a financial intelligence unit in that country.

'We are working to make sure the FIA is fully operational; we want to make sure our system is protected from financial crime,' she said.

'The priority is to recruit a director and we are also developing an extensive work plan which will guide us until the director is appointed. There are many stakeholders involved in the FIA's mandate and we will have to draft legislation for the different sectors of the economy.

'It's a huge project and we are going to take it step by step; we are taking into consideration the fact that we don't have a budget as yet,' she said.

Madisa said by next April, the FIA's developers hope to have appointed a director and also secured an allocation in the 2011/12 budget, empowering the Agency's activities. She noted that the latest developments with regard to the Agency, mark the culmination of stakeholder efforts dating back five years.

'The Agency's development began in 2005 when government approached the US government through their Treasury Department and their Office of Technical Assistance agreed to assist us draft the relevant legislation,' she explained.

'At the time, we wanted umbrella legislation about money laundering and financial terrorism, but over time we came up with the FIA Act, which was passed last April. Last August, their regional adviser came here to talk about the form of assistance to be given to us.

'It was agreed that they will provide an adviser to be here for two years working with the Agency. Although in February it was announced that we would suspend the Agency, it emerged that parts of the Act could be implemented within budget. We also realised that we could work with the adviser to make sure the Agency takes off.'

The FIA will be a central agency responsible for requesting, receiving, analysing and disseminating financial information to investigatory authorities. Its core functions include eradicating financial crime such as money laundering, corruption and tax evasion, while equally stamping out financing of terrorism, human trafficking and illegal drug smuggling.

At present, government has activated Part II of the FIA Act which deals with the Agency's establishment and the recruitment of a director and other officers. Part III, dealing with the establishment of a National Financial Intelligence Committee, is yet to be effected. Amongst many duties, the Committee will formulate and monitor policies and measures designed to combat financial crime.

Among its various provisions, the FIA Act requires financial institutions to identify their clients and keep their records. Banks are also required 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.