FIA laments weakness in pursuing dirty money
The country’s authorities tasked with fighting financial crimes are struggling with institutional weaknesses and an unfocused response to money laundering, terrorism, and its funding, BusinessWeek has learnt.
Financial Intelligence Agency (FIA) Deputy Director General, Legal and Compliance, Susan Mangori, recently revealed that the biggest contributors to the situation include the country’s weak controls in money value transfer services combined with outdated legislation, lack of cooperation and coordination as well as poor investigations and prosecution.
Presenting during the Anti-Money Laundering, Terrorism Financing, and Proliferation Financing conference recently, Mangori said Botswana’s exposure to dirty money was currently rated medium-high with offences raising the most threats being drug trafficking, tax crimes, fraud, poaching, and motor vehicle theft. “We have identified that between 2017 and 2022, Botswana’s overall money laundering threat remained medium-high with the vulnerability rating also being medium-high,” she said.
“Last year the overall money laundering threat had not changed and was still a medium-high.
“The overall sectoral vulnerability was at a medium when put on the risk metrics.”
During the period under review, three cases of money laundering were recorded with one acquitted and two cases with convictions. In 2017 crimes such as poaching, motor vehicle theft, tax evasion, obtaining by false pretences and corruption were considered as high threats.
Mangori said FIA used a World Bank tool on national money laundering and terrorist financing risk assessment tool to conduct its risk assessment.
“We had 14 modules that we looked at in the risk assessment, with 13 leading to money laundering threats and vulnerabilities in different sectors and one relating to terrorist financing,” she said.
“We gathered our data through questionnaires and interviews, did some literature reviews, and had 14 groups working on the national risk assessment.”
Mangori stressed the need to improve the quality of intelligence reports, expedite prosecution of money laundering cases and build a comprehensive framework and national AML/CFT.
“We need to be able to show as a jurisdiction what money laundering cases we have prosecuted. We also realised that we need to look at issues that pursue the proceeds of crimes,” she said.
“Again there has been reference to parallel financial investigations and we need to follow the money.”
Last year FIA was alarmed as their data showed that cash transaction reports or those involving P10,000 and above, jumped to P61.7 billion in 2022–2023 from P25.5 billion in the prior year. Cash is the preferred method of payment for illicit financial activities which include money laundering, as it bypasses checks and balances at institutions such as banks and is more difficult to trace for authorities.