As Botswana ramps up efforts to meet international financial standards ahead of an assessment in 2027 by the Financial Action Task Force (FATF), the Companies and Intellectual Property Authority (CIPA) is making strides in addressing key compliance gaps.
The FATF, the world’s leading multinational anti-money laundering agency, placed Botswana on its greylist in 2018, citing deficiencies in its monitoring and prevention structures. The move darkened the country’s investment climate for investors, whilst increasing the cost of doing business within Botswana and outside, due to the higher cost of due diligence.
Through the passage of a large number of laws and tightening of numerous regulations and policies, Botswana was removed from the greylist in 2021.
CIPA, one of the lead agencies in this effort, is amongst the key entities tasked with eliminating loopholes that could facilitate money laundering and terrorist financing.
CIPA’s head of Legal, Pego Aisam, and acting head of Compliance and Awareness, Washington Phale, discuss the organisation’s broader strategy for aligning with global anti-money laundering regulations through the upgraded Online Business Registration System (OBRS). One major upgrade involves beneficial ownership, a key standard being monitored by the FATF.
The upgraded OBRS is set to launch later this month.
MMEGI: What is beneficial ownership, and how is CIPA enforcing compliance? CIPA: Under the OBRS, all companies are required to disclose their beneficial owners, who must be natural persons. The threshold is set at 10%, meaning any individual who holds 10% or more in a company must be identified as a beneficial owner.
A beneficial owner can be a shareholder, or someone with significant control over the company, either directly or indirectly. If a beneficial owner cannot be clearly identified, those in management positions must be disclosed as beneficial owners.
To verify ownership, locals must provide an Omang, whilst foreign nationals must submit a passport. Botswana’s 2021 and 2022 legal amendments now require businesses to disclose the names and particulars of nominees and nominators, as they are considered beneficial owners.
We have developed beneficial ownership guidelines to simplify compliance and will provide clear examples to enhance understanding.
We have engaged service providers and procurement entities to help verify the information in our system, especially before awarding tenders.
Additionally, we have signed Memorandums of Understanding with banks to assist in tracing funds. The recipient’s name must match the beneficial owner’s name in our system to prevent fraudulent financial activities.
MMEGI: What is the current status of beneficial ownership compliance? CIPA: The status of beneficial ownership locally has significantly improved since the implementation of the OBRS. We have made substantial progress in capturing beneficial ownership data for all registered companies since 2018. The system requires companies to disclose beneficial owners who hold 10% or more, with mandatory verification through Omang for locals and passports for foreign nationals. We actively monitor compliance through onsite visits, system audits, and collaboration with the financial sector, ensuring reported information is accurate. Companies are responsible for updating their details and any disparities or misreporting is subject to penalties.
MMEGI: How did CIPA compile data for the beneficial ownership database? CIPA: CIPA compiled ownership data through the OBRS which was launched in 2018. Under this system, all companies are required to disclose their beneficial owners.
MMEGI: How cooperative have company owners been in providing this information? CIPA: Most companies have complied, although some challenges still persist.
MMEGI: How accurate is the current beneficial ownership database? CIPA: We believe since 2018, we have captured beneficial ownership details for all registered companies through OBRS. Our focus is now on enhancing the depth and accuracy of the data collected. During company registration, Omang or passport (foreigners) certification is mandatory, if an application lacks sufficient proof, we return it for correction.
In addition, we work closely with financial institutions, including the Botswana Stock Exchange (BSE), to monitor data integrity. To ensure compliance, hefty penalties are imposed for misreporting. Under the 2025 amendment, companies must report any changes in beneficial ownership within 10 days. Failure to do so will result in penalties.
MMEGI: CIPA previously mentioned plans to make the database public. What is the latest update? CIPA: The updated OBRS will be revealing the beneficial ownership. OBRS was introduced in 2021 as part of the government’s broader strategy to combat money laundering and improve business transparency in Botswana. The OBRS now provides free public access to company details, including shareholders.
MMEGI: What should Batswana do if they have information about beneficial owners missing from the database? CIPA: We urge the public to report any discrepancies. We have a whistleblower protection policy that allows individuals to report anonymously.
MMEGI: Why is it important for CIPA and the public to have access to beneficial ownership information? CIPA: The FATF assessment highlighted that a lack of transparency makes it difficult to identify the true power behind financial transactions, creating opportunities for money laundering and financial crime.
MMEGI: Please share any notable trends you saw as you gathered this data eg, are the majority beneficial owners located in the country or outside? What sectors are those located outside the country involved in? CIPA: Most beneficial owners are local, as the majority of Botswana’s registered companies are domestically owned.
MMEGI: Please add any other information you feel necessary for our readers? CIPA: ORBS will be given a facelift, which will have new features that will require all companies, both new and existing, to have a constitution.
It will also introduce enhanced features for the declaration of beneficial owners of companies which can freely be accessed by the public on the CIPA website.
An additional feature watchlist will allow users to monitor any company that they have interest in, which will give notifications when changes are made to a company that one has placed on the watchlist.
