19 Dec 2024

There is a need to align the Companies Act in order to bring it in line with the internationally recognised Financial Action Task Force (FATF) guidelines, which will ensure that the country adheres to the best international practices in financial regulations.

This was said by Minister of Trade and Entrepreneurship, Mr Tiroeaone Ntsima on December 18 when presenting the Companies Act amendment Bill for consideration by Parliament. He said the bill intended to address existing deficiencies identified by FATF, which would help boost the country’s global standing in financial integrity.

“This will ensure that the country is not used for any illicit financial activities like money laundering or terrorist financing,” he said.

Mr Ntsima said Botswana had all along been rated partially compliant by FATF, and that full compliance required such amendment the bill proposed. He further explained that the ministry would look into the advice that Companies and Intellectual Property Authority (CIPA) seemed to usurp the roles of company secretaries.

Mr Ntsima also said CIPA was still working on a constitutional template that it would share with company owners. Freezing of accounts that are suspected to conduit illicit funds is legal and done to enable investigations, Mr Ntsima said and further explained that penalties by CIPA on companies that sought re-registration were necessary as such companies knew beforehand the dates they were supposed to make annual returns.

Contributing to the bill, Gaborone Central legislator, who is also the Minister for International Relations, Dr Phenyo Butale said such amendments indicated the importance of multi-lateralism, which he said would help countries with similar challenges to tackle them as a unit.

“It is true nature of inter-connectivity of countries and so we have no other choice but to follow suit and comply to the requirements of organisations such as FATF,” he said.

Therefore, he said Botswana had no choice but to be a member of a global village that spoke the same language. Dr Butale also said Africa reportedly lost about US$50 billion due to illicit financial flows, a problem that indirectly affected development projects and jobs creation. He said the proposed law would also help address issues of transfer pricing, tax evasion and low tax collection.

Nkange legislator, Mr Motlhaleemang Moalosi said as much as it was necessary to regulate company secretaries, there was also a need to set educational qualifications for them. He said although most people ran companies, they were blind to the fact that they should have a constitution, and therefore, urged fellow legislators to make it their responsibility to enlighten their constituents.

He also made a request that CIPA should exempt from re-registration penalties, companies that failed to make returns while government still owed then, hence were de-registered.

Takatokwane legislator, who is also the Minister of Sports and Arts, Mr Jacob Kelebeng said  it was only proper for Botswana to amend its laws in compliance with FATF requirements as the country had all along been partially compliant.

“This is to just close the inadequacies, which will result in easy information sharing with equally compliant countries in case there is a need for investigations,” he said.

He also advised government to guard against CIPA’s tendency of usurping the role of company secretaries.

Gamalete legislator, Mr Boniface Mabeo equally supported the bill, indicating that it would help facilitate and promote economic growth through encouraging ease of doing business. Ends