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FEATURE STORY

Botswana Takes Action to Assess and Prevent Financial Crimes

March 14, 2017

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STORY HIGHLIGHTS
  • Botswana is the eleventh country in Africa to complete the extensive National Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) Risk Assessment.
  • This risk assessment revealed certain vulnerabilities and threat, but also suggested measures to prevent and detect money laundering, terrorist financing, corruption, and other financial crimes.
  • The knowledge gained from the assessment will help officials to target actions to more effectively prevent, detect, investigate & prosecute money laundering, terrorist financing and other financial crimes, including corruption, in order to contribute to stronger economic development.

GABORONE, March 14, 2017—Botswana has just completed a National Anti-Money Laundering (AML) and Counter Financing of Terrorism (CFT) Risk Assessment. The National Risk Assessment (NRA) was supported by the World Bank which resulted in the adoption by officials of a National AML/CFT Risk Assessment Report and Action Plan presented at a three-day workshop. Botswana is the eleventh country in Africa to do so.

In 2012, an international obligation was adopted by the Financial Action Task Force (FATF) requiring all countries to undertake a National AML/CFT Risk Assessment. The goal behind this was to bring about stronger more effective AML/CFT systems by identifying the risks a country faces and targeting scarce resources in a way that mitigates the identified risks, threats, and vulnerabilities.

Prior to 2012, there was no precedent of a country that had undertaken a National AML/CFT Risk Assessment (NRA), and because such a task was regarded as complicated and daunting, the World Bank’s Financial Integrity Unit saw it fit to develop a National AML/CFT Risk Assessment Tool. The tool was developed to aid countries that needed assistance and guidance on how to commence such an assessment. Botswana was one of the countries that requested the World Bank Group’s help with conducting the assessment in 2014.  To date, the World Bank’s NRA Tool has been used by more than 40 countries to complete NRAs, 30 more countries have commenced NRAs using the World Bank NRA Tool, and another 30+ countries have requested World Bank technical assistance and the NRA Tool to support the commencement of their NRAs.   

“The World Bank’s National Risk Assessment tool helped to add value to this important work by providing a more thorough understanding of how to assess actual money laundering and terrorist financing risks using clear data,” said Elene Imnadze, World Bank Botswana Country Representative at the NRA workshop. “The World Bank stands ready to support Botswana’s work and help it become a leading African country in effectively meeting international obligations.”

The recently completed process involved more than 50 officials representing approximately 20 collaborating ministries and a number of agencies. Officials with AML/CFT expertise worked to collect and analyze large amounts of data, information and statistics to identify and prioritize the main money laundering and terrorist financing risks Botswana faces.  Risks are assessed by collecting data and information to measure “threats” and “vulnerabilities.”  Threats are existing (internal or external) circumstances and systems that cannot be eliminated, so they must be mitigated, like illegal activities abroad that cross borders into Botswana, and even Botswana’s own financial system.  Vulnerabilities are the internal mitigation systems, for example effectiveness of customs and border control systems, and controls in the financial sector.  When the effectiveness of the vulnerabilities are measured (and rated) against the various threat levels, these comparisons produce an overall risk level which indicates to a country how well existing systems are mitigating the risks, and where improvements are needed.  Such system of assessment also enables officials to prioritize risks so that resources can be more effectively targeted to mitigate them.  

The money laundering risks identified at the workshop were based on data indicating higher levels of criminality linked to wildlife poaching, weak controls in the diamond sector, auto theft, and financial crimes like tax evasion and corruption.  Weaknesses in national AML/CFT controls systems were identified in the legal frameworks and effectiveness of implementation.  The completion of the National AML/CFT Risk Assessment indicates that Botswana has complied with an important international AML/CFT obligation which other countries in the world are in the process of undertaking. 

“We appreciate the assistance we have received from the World Bank throughout the duration of the National Risk Assessment project. We are also grateful for the NRA working groups and the selflessness and enthusiasm they exhibited during the course of the project. Moving forward I hope we will be able to strengthen our legal framework, which is our first line of defense in the fight against money laundering and terrorist financing,” remarked Elaina Gonsalves, Deputy Secretary for economic and finance policy in the Ministry of Finance and Economic Development.

The identified risks and threats from the National AML/CFT Risk Assessment will assist the officials to strengthen country systems and apply appropriate control measures in order to fight money laundering, terrorist financing, and related underlying criminal activities including corruption, pursuant to international AML/CFT obligations*. This system, once fully operational, will stem illicit financing flows (IFFs) and contribute to stronger economic development, shared prosperity, and help reduce poverty. 

*International AML/CFT obligations are based on various international treaties & conventions.  These obligations are specified in the 40 Recommendations of the Financial Action Task Force Against Money Laundering/Terrorist Financing (FATF).  These can be found at: http://www.fatf-gafi.org/publications/fatfrecommendations/documents/fatf-recommendations.html


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