Botswana delivering on its pledge to

Ihave the honour to present to this Honourable House, for second reading, the Financial Intelligence Bill, 2021, Bill No. 34 of 2021.

Allow me to provide background and context before I highlight the clauses of this Bill. By way of background, the Financial Action Task Force ( FATF) has 40 Recommendations/ Standards which countries have to comply with in order to tackle money laundering, terrorist financing and the financing of proliferation. The rating of countries against the 40 recommendations are classified as;

( i) Compliant,

( ii) Largely Compliant,

( iii) Partly Compliant, or

( iv) Not Compliant. During the assessment in 2017, Botswana was found to have serious strategic deficiencies in her anti- money laundering and combating the financing of terrorism and proliferation ( AML/ CFT/ CFP) framework. No recommendation was rated Compliant; three ( 3) were Largely Compliant; thirteen ( 13) were Partially Compliant; twenty- three ( 23) Non- Compliant while one ( 1) was not Applicable. These led to the country being grey- listed by the FATF in 2018 and blacklisted by the EU in 2020.

Remedial actions towards being removed from the grey- list and the blacklist became a priority for the country. This is evidenced by the 25 pieces of legislation passed by Parliament in 2018 and a further 6 in 2019. All these efforts led to Botswana being removed from the grey- list in October 2021 because we had largely addressed the deficiencies and attained adequate effectiveness in the implementation of the AML/ CFT/ CFP measures identified in the 2017 Mutual Evaluation Review. As at the end of December 2021, the country was rated Compliant on seven ( 7) FATF recommendations; Largely Compliant on twenty- two ( 22); Partially Compliant on eight ( 8); Non- Compliant on two ( 2) and one ( 1) was Non- Applicable.

During the onsite visit by the FATF delegation in August 2021, Botswana had made a commitment at the highest political level to continue strengthening the effectiveness of its anti- money laundering/ combating of terrorism and proliferation financing ( AML/ CFT/ CFP) regime. It is in line with that highest level of political commitment that Botswana is delivering on its pledge and obligation by addressing the remaining deficiencies. In this regard, all stakeholders responsible to Anti- Money Laundering ( AML) and Combating of Financing of Terrorism ( CFT) initiatives recently embarked on a holistic review of the Financial Intelligence Act 2019, to address deficiencies identified during assessments carried out by the Eastern and Southern Africa AntiMoney Laundering Group ( ESAAMLG) and Financial Action Task Force ( FATF). This resulted in the proposed overhaul of the Financial Intelligence Act and consequential amendments to several other laws. The amendments are intended to address the ten ( 10) recommendations where two ( 2) are currently rated non- compliant and eight ( 8) partially compliant. The amendments of these laws will strengthen the Anti- Money Laundering/ Countering Financing of Terrorism and Proliferation efforts in Botswana and will also put the country in a good position during the next Mutual Evaluation in 2024.

The procedure at ESAAMLG is that after a country has amended its legislation they are allowed to request for re- rating of FATF Recommendations that are still rated Non- Compliant and Partially Complaint. Further, the request for re- rating has to be made at least six ( 6) months in advance of the ESAAMLG Task Force Plenary meetings. This means that for Botswana, the request for rerating can only be considered during the September 2022 meeting of ESAAMLG. In its request for re- rating, the country has to submit all other information supporting the request for re- rating to the ESAAMLG Secretariat. This supporting information refers to relevant laws, regulations or other AML/ CFT/ CFP measures that are in force and effect. It is crucial that the FI Bill and others be enacted expeditiously for the country to submit a request for re- rating in February 2022. It is in this regard that through the Office of His Honour the Vice President, the Speakership was requested for a special meeting of Parliament in January 2022, before the Budget meeting.

I therefore crave Parliament’s indulgence for responding positively to this national duty by agreeing to convene this special session to consider these Bills.

Going forward, I expect that further amendments to AML/ CTF/ CFP related laws will only be brought about by new changes that FATF will introduce in the global standards.

The re- enactment of the Financial Intelligence Act has caused consequential amendments to other pieces of legislation. These are the a) Companies Act