9th November 2022
Sello Motseta
Botswana’s assumption of the position of leadership in the Eastern and South African Anti Money laundering(ESAAMLG) in September for a period of12 months until August 2023,has emboldened it to take a pioneering role identifying, assessing and understanding the money laundering and terrorist financing risks for the country so it can take appropriate actions to mitigate risks.
The desire is to further strengthen measures to combat money laundering, terrorism financing, proliferation financing and ensure that FATF Recommendations are adequately implemented.
Bopelokgale Soko, Director General of the Financial Intelligence Agency(FIA),said “Botswana is a member of the eastern and South African Anti Money Laundering Group(ESAAMLG),a regional body responsible for ensuring that member countries have effective measures to combat money laundering, terrorism financing, proliferation financing and that the FATF Recommendations are adequately implemented”
She said, ”Being a leader of ESAAMLG means that the country should take the lead in the regional fight against ML/TF and PF. Botswana has therefore made a commitment to continuously strengthen its AML/CFT/CFP Framework.”
According to officials car dealerships were found to be highly threatened by the ML risks emanating from predicate offences such as ’false declaration,’ ‘tax evasions,’ ‘stealing by Agent,’ ‘stealing by person employed in the Public Service’ and ’abuse of public office.’
During period under review, BURS reported 120 cases of false declaration involving 4074 vehicles, imported by 78 motor dealers. Total amount of tax revue recovered from the cases amounted toP8 214 822.55.Thseseinvolved cases of both undervaluation and fiscal fraud.
Car dealerships were found to be highly vulnerable to ML risks emanating from pedicate offences. The number of predicate offences during the period under review was 150,with a corresponding value of P64492 924.13.
Predicate offences that posed high ML threat in the sector were ‘false declaration, ’tax evasions,’ ‘stealing by agent,’ ‘stealing by person employed in the public service’ and Abuse of office.’
The assessment found that the illegal proceeds obtained from these pedicate offences were mainly used to purchase vehicles. As a result the overall rating for ML was medium high.
New cars were mainly imported from South Africa and imported pre-owned vehicles were mainly from Japan, Singapore and the United Kingdom.
As at July 2020, there were 87 registered car dealerships nationwide, constituting of 68 Imported Pre-Owned Motor Dealer’s(IPMD) and 19 Specialised Motor Dealers(SMD’s).
Sarah Molale, Deputy Secretary for Financial Administration in the Ministry of Finance and Economic Development, said “The car dealership sector is one such sector that does not have a designated supervisory authority for AML/CFT/CFP supervision, hence the FIA is the de facto supervisory authority for the sector.”
She said, ”The risk assessment was carried out to fulfil the requirements of the Financial Intelligence Act,2022and on the international space, to comply with the Financial Action Task Force(FATF) Recommendations and to be specific, Recommendation 1. .”
Recommendation 1 requires countries to identify, assess and understand the Money Laundering and Terrorist Financing risks and to take proportionate actions commensurate with the identified risks to ensure that the risks are mitigated effectively.
The aim is to ensure that criminals do not use the financial system to clean dirty money and finance terrorist activities.
