Bureaux de Changes violate Anti-Money Laundering requirements
The 2020 Banking Supervision Report has highlighted that some Bureaux de Changes in Botswana are not fully compliant with the Anti-Money Laundering/ Combating the Financing of Terrorism (AML/CFT) requirements.
During the year, the central bank conducted AML/CFT on-site examination at three bureaux de changes and were all not found to be fully compliant with the requirements.
It was found that their risk mitigation measures were not commensurate with the high risk of Money Laundering and Terrorist Financing (ML/TF) to which bureau de changes were exposed to.
For all the three bureaux de changes, it was observed that the ML/TF risk was high, while the risk mitigation measures were weak.
As a result, the bureaux de changes were fined and directed to regularize all compliance deficiencies.
The on-site examinations exposed some of the most common violations of the Financial Intelligence Act (FIA) of 2019 by these bureau de changes.
One of the provisions of the Act which was violated was corporate governance as it was observed that these bureau de change AML/CFT policies were not approved by management and did not have compliance officers.
They also commonly violated the provision of customer identification as they did not conduct due diligence on high-risk customers and did not record the source of funds for customers.
Three bureau de changes are said to have conducted large-cash transactions but did not record some of the know-your-customer information.
Further, the bureau de changes are said to have mostly violated the monitoring and reporting of suspicious transactions provision of the FIA Act.
This is because there was no formal process for monitoring customer transactions against their profiles.
These three bureaux de changes that were examined, were found not conversant with the preparation and submission of suspicious transaction reports and did not, contrary to requirement, report suspicious transactions to the FIA within five working days.
The supervision reports highlighted that the bureau de changes also commonly violated the provision of record-keeping as they did not have documented procedures and processes to adequately address the preparation and filing of large cash transactions.