Botswana gets tough on money laundering

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Mpho Tebele

Gaborone - Botswana has, with immediate effect, enforced the Beneficial Ownership Information Act in an effort to address escalating cases of international money laundering.

The latest development comes in the wake of multiple corruption charges preferred on the former Directorate of Intelligence Services Director, Isaac Kgosi, by law enforcement agencies and the decision by the European Union to blacklist Botswana as a haven for money laundering.

Kgosi and his associates are alleged to have laundered millions of US dollars to offshore accounts. But the former spy chief has since denied the claims.

The new law stipulates that those who register companies will be required to provide the Companies and Intellectual Property Authority (CIPA) with beneficial ownership information pursuant to Section 21 and 345 of the Companies (Amendment) Act 2018, and in line with the Financial Intelligence Agency (FIA) Act.

The new legislation has assigned responsibility to CIPA to establish and maintain a register of beneficial ownership for companies.

In layman's terms, the Act states that a beneficial owner of a company enjoys the benefits or proceeds of a company or controls a company without being on record as the official owner. 

 Registrar of Companies and Business Names, Hilda Mocuminyane, said, "It should be noted that implementation of a register of beneficial ownership is not peculiar to Botswana, as it is now a requirement for most corporate registries around the world."

 She explained that a beneficial ownership registry is a key tool for curbing corruption and reducing instances of money laundering and terrorism financing by identifying the real owners of registered companies. 

According to Mocuminyane, a beneficial owner of a company is defined in terms of the Companies (Amendment) Act 2018 as “any natural person who directly or indirectly through any contact, arrangement, understanding, relationship or otherwise, is the ultimate beneficiary of a share or other securities in a company”.

She said CIPA has introduced new registration forms that will enable all those who register companies to provide beneficial ownership information. In addition, with the commencement of the Online Business Registration System (OBRS) in June 2019, all registered companies and business names will be required to re-register and provide beneficial ownership information to CIPA.

Mocuminyane stated that in addition to providing the details of directors and shareholders, the new forms require applicants to provide the names, addresses and details of all beneficial owners of the company. She said the introduction of these new forms means that the company registration process, which has previously been three steps, is now compressed to two steps, as applicants will no longer be required to sign a declaration form with the Botswana Police Service.

The Companies Act stipulates that non-compliance with the new legislation is an offence and may attract a jail term not exceeding five years or a fine not exceeding P200,000.

CIPA is charged with the implementation and administration of four pieces of legislation, namely, the Companies Act, Registration of Business Names Act, Copyright and Neighbouring Rights Act, and the Industrial Property Act.

Through these acts, CIPA is mandated to register companies and business names, protect the rights of authors and artists, and protect industrial property rights in relation to patents, trademarks, utility models, industrial designs, traditional knowledge, integrated circuits, geographical indications and handicrafts.

 

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