Botswana, removed from the FATF blacklist in 2021, is focusing on improving its anti-money laundering and counter-terrorism financing frameworks. The government is allocating part of its budget to support regional initiatives and prepare for upcoming evaluations. Despite progress, past evaluations highlight the need for further capability in investigating non-profit organizations. A Memorandum of Understanding with the Financial Intelligence Agency aims to foster training and compliance ahead of the next evaluation cycle.
Botswana’s greylisting by the Financial Action Task Force (FATF) in 2018 due to deficiencies in its anti-money laundering (AML) and counter-terrorism financing (CFT) frameworks led to its inclusion on a European Union blacklist in 2019. This negatively impacted local financial institutions and weakened Botswana’s investment climate by increasing costs associated with due diligence in international dealings. Although FATF removed Botswana from the blacklist in late 2021, concerns about future classification persisted.
In response, the government is now allocating part of its P3.06 billion budget to support activities of the Eastern & Southern Africa Anti-Money Laundering Group (ESAAMLG). Finance Minister Ndaba Gaolathe stated this support aims to enhance Botswana’s position as a regional AML/CFT training hub, ensuring compliance with international standards and maintaining its reputation as a secure business environment.
Former President Mokgweetsi Masisi previously expressed that Botswana must collaborate with global partners to avoid greylisting in the future. During the Global Citizen NOW 2024 Summit, he highlighted the exchange of strategies on regulatory and financial matters with the Bahamas, emphasizing the need for diligence to prevent any regression in their compliance status.
Following a 2022 report on Botswana’s AML/CFT measures post-2017 evaluation, progress was noted but significant gaps remain, particularly in investigating non-profit organizations (NPOs) potentially at risk of terrorism financing. The report indicated the need for stronger mechanisms to provide information regarding NPO compliance, stating that local authorities lack the capabilities to respond adequately to such international inquiries.
Last year, the University of Botswana (UB) and the Financial Intelligence Agency (FIA) established a Memorandum of Understanding to develop an institute focused on combating illicit financial flows. This initiative aims to prepare Botswana for its upcoming mutual evaluation cycle in January 2027, emphasizing training and capacity-building as critical measures for enhancing the effectiveness of the country’s AML/CFT regime as per FATF standards.
Botswana is taking proactive measures to enhance its anti-money laundering and counter-terrorism financing frameworks, following past greylisting by the FATF. The government’s budget allocations towards regional collaboration and training, alongside efforts to close compliance gaps identified in evaluations, underline its commitment to maintaining good standing among global financial institutions and avoiding future regulatory setbacks.
Original Source: www.mmegi.bw
