Botswana AML for Accountants: Financial Intelligence Act 2022

Botswana's Financial Intelligence Act 2022 (Act No. 2 of 2022) sets the anti-money laundering (AML) duties for accountants and several other professions. It received assent and commenced on 25 February 2022. This guide is based on the Act as hosted on the website of the Non-Bank Financial Institutions Regulatory Authority (NBFIRA). It is a primary source, but two limits apply: the Act leaves several amounts and deadlines to be "prescribed" in regulations that we did not read, and we have not checked for amendments since 2022.

Are accountants covered?

Yes. Section 2 defines a "specified party" as a person listed in Schedule I. Item 2 of Schedule I lists "an accountant as defined under the Accountants Act, Cap. 61:05", covered when preparing for or carrying out certain client transactions, in the same way as attorneys under item 1. Auditors are not listed by name in Schedule I. Section 38(3) adds that an attorney, conveyancer, notary public or accountant must report suspicious transactions when acting for a client in listed activities such as managing client money or organising company formation.

Who supervises accountants

Schedule II names the Botswana Institute of Chartered Accountants (BICA), established under the Accountants Act, as the supervisory authority for accountants. It also names the Botswana Accountancy Oversight Authority, established under the Financial Reporting Act, although the text does not link that body to a particular Schedule I entry, and it names no auditor-specific supervisory authority. Under section 2, the Financial Intelligence Agency acts as supervisory authority where a specified party or accountable institution has none. The supervisory authority is also the body that imposes the administrative fines described below.

Compliance officer and programme

Section 14 requires a compliance officer to be designated at management level, who must be a fit and proper person meeting listed criteria such as having no conviction for a serious offence. Failing to maintain a compliance programme carries an administrative fine of up to P5,000,000 (section 14(4)).

Customer due diligence

Section 16(1) requires due diligence when establishing a business relationship, when carrying out transactions at or above a prescribed amount, for domestic or international wire transfers, when there is doubt about earlier identification data, and when a financial offence is suspected. The threshold is not stated in the Act. Section 20(1) requires identity and beneficial owner verification before the relationship starts or the transaction is carried out, and section 20(6) lists accepted proof of identity, such as a National Identity Card for citizens or a passport for non-citizens. Section 20(10) allows a party to stop due diligence and file a suspicious transaction report instead where continuing would risk tipping off the customer. For the principles in practice, see our guide to customer due diligence in accountancy practices.

Records: 20 years

Section 32(1) requires transaction records to be kept for 20 years from the date the transaction is concluded, and other due diligence records for 20 years after the relationship or occasional transaction ends. That is longer than the periods we describe in our guides to Zambia (ten years) and Mauritius (seven years), so check your storage and deletion policies. Failing to comply with the record-keeping duty carries an administrative fine of up to P500,000 (section 35(1)), and destroying records is an offence with a fine of up to P500,000, up to 10 years' imprisonment, or both (section 35(2)).

Reporting

Under section 38, suspicious transactions must be reported "within such period as may be prescribed", and no fixed deadline appears in the Act. Reports are required during establishment of a relationship, during the relationship, and for occasional transactions, and section 30(2) requires terminated relationships to be reported as suspicious transactions. Cash transactions at or above a prescribed amount must also be reported (section 39(1)), with the figure again left to regulation.

Tipping off

Section 46(3) and (4) prohibit disclosing information that could prejudice an investigation, or disclosing that the Agency requested further information under section 52(1). The penalty is a fine of up to P2,000,000, imprisonment of up to 15 years, or both.

Penalties at a glance

The Act sets administrative fines, imposed by the supervisory authority, and criminal penalties. Those relevant to a firm of accountants include:

• P500,000: record-keeping failures (section 35(1));
• P1,000,000: risk assessment failures (section 13(7) and (8)), due diligence failures (section 16(4)) and cash reporting failures (section 39(2));
• P1,500,000: ongoing due diligence (section 19(3)), enhanced due diligence (section 21(2)) and monitoring (section 29(2));
• P5,000,000: compliance programmes (section 14(4)) and suspicious transaction reporting (section 38(6)(a));
• criminal: failure to report or interrupted transactions, a fine of up to P3,000,000, up to 20 years' imprisonment, or both (section 46(2));
• criminal: false identification, a fine of up to P500,000, up to 10 years, or both (section 20(7)); and non-compliance by senior management, a fine of up to P250,000, up to five years, or both (section 48).

What we could not confirm

• The prescribed amounts and periods for due diligence thresholds, cash reports and suspicious transaction reports, which sit in regulations we did not read.
• Whether registration with the Financial Intelligence Agency is required, which the text we read did not address.
• BICA's own guidance for members, and any amendments since 2022.

Practical steps: our suggestions

These are our suggestions, not requirements of the Act.

1. Confirm with BICA that your firm is within its supervision and ask for its current AML guidance.
2. Designate a compliance officer at management level and keep evidence of the fit and proper checks.
3. Extend your retention schedule to 20 years for client and transaction records.
4. Obtain the current regulations to find the prescribed reporting periods and thresholds, and build them into procedures.
5. Train staff on tipping off, given the penalties above.

For comparison with other southern African regimes, see our guide to South Africa.

Frequently asked questions

Who supervises accountants in Botswana?

BICA, according to Schedule II of the Financial Intelligence Act 2022.

How long must records be kept?

20 years, under section 32(1).

Are auditors covered?

Schedule I lists accountants, not auditors by name. Ask BICA how it treats audit work.

This guide is general information, not legal advice.