Bots on high alert as money laundering claims escalate

Mpho Tebele

Gaborone – Botswana is on high alert following reports that cash smugglers could have externalised more than $7 million dollars from Zimbabwe into the country.

Bank of Botswana (BoB) governor Moses Pelaelo revealed that together with the Financial Intelligence Agency, they are monitoring some local banks following reports that they may have been used as conduits for money laundering activities by some depositors from neighbouring Zimbabwe.

Pelaelo’s remarks come in the wake of the arrest by Zimbabwean police last month of the director of Yakuts Marketing (Pvt) Ltd, Farid Shahadat, who was on police wanted list, for allegedly externalising more than $1 million to Botswana as part of efforts to deal with the current liquidity and cash crisis in the country intensify.

Zimbabwean police recently launched a manhunt for three businesspeople on allegations of externalising a total of $7,3 million this year, on different occasions, leading to the arrest of Shahadat.

The other two accused persons are still at large and police are still looking for them. Shahadat who allegedly externalised $1 197 580, last week appeared before magistrate Josephine Sande, charged with contravening the Exchange Control Act.

With the help of other couriers, Shahadat crossed into Botswana with large amounts of money.

They deposited a total of $1 197 580 into his three foreign bank accounts — Stanbic Bank account number 906 000 257 2465, Stanbic Bank (906 000 257 2504) and Capital Bank (000 370 300 8498).

Investigations revealed that the export of currency to Botswana by Shahadat was done without the approval of the Reserve Bank of Zimbabwe.

Speaking at an event to mark the official opening of one of the local banks in Gaborone, Pelaelo said Botswana banks were also required to routinely monitor accounts for suspicious activity and file Suspicious Transactions Reports (STR) with the Financial Intelligence Agency.

He said that while reporting suspicious transactions is not evident of illegality, such reports trigger appropriate steps, including follow up action by relevant authorities, such as the BoB, Non-bank Financial Institutions Regulatory Authority and other law enforcement agencies.

“Having said that, I can confirm that both the Financial Intelligence Agency and the Bank of Botswana continue to monitor and enforce, in line with their respective mandate, local banks’ compliance with applicable laws, business conduct requirements, as well as the Anti-Money Laundering and Combating the Financing of Terrorism protocols,” he revealed.

He said Botswana’s banking and other laws permit non-residents to open accounts in local banks, but there is a legal requirement to declare any cross-border transfers, including cash in any currency equivalent to P10,000 and above.

He added that in opening accounts and accepting deposits by non-residents, the local banks were doing so in compliance with Botswana laws.

“Banks are, however, required to consistently undertake effective due diligence, including strict application of the Know Your Customer procedures for any such transactions and/or customers,” said Pelaelo.

He further stated, “Banks also need to ensure that any cross-border cash deposits and similar inward transfers are supported by duly completed and valid documents, when processing such transactions.”

On other issues, Pelaelo allayed fears that there is a looming liquidity crunch. According to the governor, local commercial banks have about P19 billion available to lend out to customers.

“I can report that banks have sufficient liquidity, totaling approximately P19 billion, inclusive of Bank of Botswana Certificates and balances held abroad, both of which could be liquidated in case of need, with minimal capital loss, to finance any effective and viable demand for credit.

September 2017
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