Banking financial service laws in Botswana are proposed to be amended to comply with the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) mutual evaluation to Botswana. The banking financial service laws proposed to be amended are the Banking Act, the Proceeds and Instruments of Crime Act and the Financial Intelligence Act.

The amendments are as a result of Botswana realising that it is critical and urgent that Botswana aligns its banking legislations to international standards in order to attain technical compliance and to avoid being referred to the FATFs International Cooperation Review Group (ICRG) as a non-cooperative country.

The two crucial amendments in the Banking (Amendment) Bill that should be of interest to licensed banks are:

• The dispensation with the dual reporting functions to the Central Bank and the Financial Intelligence Agency (FIA)

The Banking (Amendment) Bill proposes to dispense with the dual reporting functions to the Central Bank and the FIA regarding suspicious transactions. In the event that the Banking (Amendment) Bill is passed licensed banks will only have to report the suspicious transactions to FIA. This will be a welcome development by licensed banks who have found it quite administrative and time consuming to report both to the Bank of Botswana and the FIA.

• Widening of circumstances in which the duty of confidentiality of a banker to a customer will not apply

Circumstances in which the duty of confidentiality imposed on a banker to a customer can be derogated from are proposed to be widened to include the following:

• if the information is required by FIA in accordance with the Financial Intelligence Act;
• if the information is being sought for commercial reasons and is required by another bank in relation to:
• the opening of an account
• the provision of any correspondent banking services:

Provided that enhanced due diligence measures shall be applied by a banker to high-risk cross border correspondent banking relationships, or

• a wire transfer transaction for a customer
• the bank is required to provide additional information to FIA on a suspicious transaction report that it has filed with FIA in accordance with the provisions of the Financial Intelligence Act;
• the customer has passed away, testate in intestate and the information is required in relation to succession of the estate.
• the Bank of Botswana has consented in writing to the disclosure of the information.

The said section 43 of the Banking (Amendment) Bill is proposed to be carefully amended in order to strive and maintain the principle of safeguarding confidentiality of customer information.

The Proceeds and Instruments of Crime Act and the Financial Intelligence Act are proposed to be amended to close the gaps pertaining to money laundering that has been identified by the ESAAMLG mutual evaluation of Botswana. Further information on this please contact the writer.