18 Dec 2024

Members of Parliament have supported strengthening the Financial Intelligence Act of 2022, through amending it to avert the risks of the country being grey listed in future.

The MPs, who were debating the Financial Intelligence (Amendment) Bill of 2024, tabled by Minister of Finance and Vice President, Mr Ndaba Gaolathe on Tuesday said a clean and transparent financial system was good for the country.

Member of Okavango West, Mr Kenny Kapinga said a reputable financial system would restore investor confidence in the country’s financial systems hence lure investors.

However, he expressed discomfort with the independence of the country’s Financial Intelligence Agency (FIA), saying the power of appointing its director general was centered on the President.

If FIA becomes independent and professional, it would be respected by international organisations, said Mr Kapinga.

Mmadinare MP, Mr Ketlhalefile Motshegwa supported the amendment and further said the government would allow and empower institutions to act without political interference and duress.

As such, he said the government would listen and ensure the independence of the FIA as it would be the right thing to do adding that there must be procedural and substantive fairness in dealing with the FIA governance.

Member of Parliament for Chobe, Mr Oscar Mapulanga said anti money laundering, counter financing of terrorism and financing proliferation was an important subject for the public to understand. However, he said the public was left behind to understand the issue and called for public education. Mr Mapulanga said there was a need to understand what contributed to the country’s persistent risks of being grey listed.

Mogoditshane West Member of Parliament, Mr Galenawabo Lekau for his part said there was need for members of the public to be educated on the subject, saying that it was necessary that community members could be used for illicit transactions. He said the bill in its current form was not sufficient and needed to be beefed up to be able to detect and adequately fight illicit financing.

Member of Parliament for Selebi Phikwe West, Mr Reuben Kaiser pointed out that FIA director general had been given more powers and issues of checks and balances where not stipulated therefore, called for an oversight mechanism to ensure that power was not misused.

Vice President and Minister of Finance, Mr Ndaba Gaolathe thanked Parliament for supporting the amendment. Earlier when presenting the bill before Parliament, Mr Gaolathe said proposed amendments were crucial to address deficiencies in the FIA Act in order to comply with the recommendations of FATF, and avoid grey listed for non-compliance.

He said as a member of the Eastern and Southern African Anti-Money Laundering Group (ESAAMLG), the country was obligated to be peer reviewed by other member states or by international bodies.

Mr Gaolathe said currently, the country had seven outstanding FATF recommendations, four of which require amendment of the FIA Act. Such include recommendations on non-profit organisations, which require countries to identify non-profit organisations which are at risk of being abused for money laundering, terrorism financing and proliferation financing, said Mr Gaolathe.

Also, he said the FIA Act required supervisory authorities to take necessary legal and regulatory measures to prevent criminals from holding controlling interest or being beneficial owner of or holding management function of the applicant however, said criminal associates were not legally barred.

The Vice President said while Botswana was able to impose sanctions against non-profit organisations in terms of the act, the range of sanctions was limited to administrative fines, de-registration, and de-licensing.

Other appropriate and dissuasive sanctions, such as freezing of accounts and removal of trustees, were not included in the law, Mr Gaolathe said and added that the amendment sought to broaden the sanctions regime to include these.

He further said the Ministry of Finance proposed further revisions to align the act with international standards and assist in ease of operations, noting that other additional amendments would address implementation challenges caused by lack of clarity in some sections of the act. ENDS