Anti Money Laundering (AML) in Botswana

Money laundering in Botswana is a considerable risk, as the country’s well-developed banking sector makes it extremely vulnerable. Additionally, Botswana is exposed to further risk as its Anti Money Laundering (AML) regime provides minimal guidance to financial institutions in comparison to international standards.

The Proceeds of Serious Crime Act of 1990 and its 2001 amendment, criminalizes money laundering related to serious crimes and requires the identification of financial bodies and owners of corporations and accounts.

In 2003, the Government of Botswana enacted the Banking (AML) Regulations. According to the regulations, banks are required to record and verify the identification of all personal and corporate customers. Banks must maintain all records on transactions, both domestic and international, for at least five years. These regulations also require banks to report suspicious transactions and to designate an employee at the management level as a Money Laundering Reporting Officer (MLRO). The MLRO serves as a contact between financial institutions, the Central Bank and the Directorate on Corruption and Economic Crime (DCEC).

Banks must also comply with information requests from the DCEC, which bears some of the responsibilities of a Financial Intelligence Unit (FIU), and other law enforcement authorities. Implementation assessments performed by the Government, in 2005, found compliance with these regulations to be satisfactory. These regulations do not apply to non-bank financial institutions.

The Government of Botswana is preparing a draft strategy to combat money laundering and the financing of terrorism, including interagency procedures and coordination.

AML Training in Botswana

Botswana’s Banking (Anti Money Laundering) Regulations require all financial institutions in the country to receive proper AML training and to know how to report suspicious transactions. An AML training program is vital to the success and advancement of financial institutions in Botswana.

The Economy of Botswana

Through fiscal discipline and sound management, Botswana has transformed itself from one of the poorest countries in the world to a middle-income country.

Diamond mining has helped to stimulate the expansion of Botswana’s economy. Currently, the diamond industry accounts for more than one-third of the GDP and for 70-80% of Botswana’s export earnings. Tourism, financial services and subsistence farming are other key sectors of the growing economy.

Despite the continuous growth of the economy, the Government of Botswana must deal with high rates of unemployment and poverty. In, 2004 the unemployment rate was officially 23.8%; however, unofficial estimates place it closer to 40%. HIV/AIDS infection rates in Botswana are the second highest in the world and threaten the country’s impressive economic gains.

Banking in Botswana

The Bank of Botswana is the country’s Central Bank. The goal of the Bank of Botswana is to maintain the economic and financial well-being of the country.

The Bank of Botswana aims to promote and maintain:

• Monetary stability.
• A safe, sound and stable financial system.
• An efficient payments mechanism.
• Public confidence in the national currency
• Sound international financial relations.

In addition, the Bank of Botswana seeks to provide efficient banking services to its various clients and sound economic and financial advice to the government.

Currency in Botswana

The Botswana Pula (BWP) is the official currency of Botswana. The BWP is subdivided into 100 thebe. Coins are available in denominations of 1, 5, 10, 25 and 50 thebe and 1 pula. Banknotes are available in 10, 20, 50, and 100 pula.

Other Key Statistics of Botswana

Time Zone: UTC+2 (7 hours ahead of Washington, DC during Standard Time).

Location: Southern Africa, north of South Africa.

Population: 1,842,323 (July 2008 est.).

Note: estimates for this country explicitly take into account the effects of excess mortality due to AIDS; this can result in lower life expectancy, higher infant mortality, higher death rates, lower population growth rates, and changes in the distribution of population by age and sex than would otherwise be expected (July 2008 est.)

Labor Force: The unemployment rate is 7.5% (2007 est.).

Languages Spoken: Setswana, Kalanga, Sekgalagadi, English (official).

Trade Organizations: Botswana is a member of the World Trade Organization (WTO) and the United Nations (UN).