FATF Status

Botswana is no longer on the FATF List of Countries that have been identified as having strategic AML deficiencies

Latest FATF Statement - 21 October 2021

The FATF welcomes Botswana's significant progress in improving its AML/CFT regime. Botswana has strengthened the effectiveness of its AML/CFT regime and addressed related technical deficiencies to meet the commitments in its action plan regarding the strategic deficiencies that the FATF identified in October 2018. Botswana is therefore no longer subject to the FATF’s increased monitoring process. Botswana will continue to work with ESAAMLG to improve further its AML/CFT system. 

European Commission List of Countries with Strategic Deficiencies in their AML/CFT Regimes

Botswana  was removed from the EU Commission list of high risk countries in March 2022.

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Botswana was undertaken in 2022. According to that Evaluation, Botswana was deemed Compliant for 7 and Largely Compliant for 25 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 0 of the Effectiveness & Technical Compliance ratings.

Botswana's corruption perception has worsened, with its score on Transparency International's Corruption Perception Index dropping from 60 in 2022 to 59 in 2023, resulting in a significant decline in its global ranking from 3rd to 39th out of 180 countries. Reports indicate rising corruption levels, particularly in government procurement, despite the government's commitment to address these issues through law enforcement and ongoing investigations. The Directorate on Corruption and Economic Crime (DCEC) continues to handle corruption cases, while Botswana also participates in regional efforts to combat money laundering and terrorism financing.

Botswana's economy is primarily driven by its diamond mining sector, which accounts for over 80% of export earnings, making it the largest diamond producer by value globally. Classified as an upper middle-income country by the World Bank, Botswana maintains a stable economic environment, supported by sound fiscal policies and a well-capitalized banking system, although it faces challenges in diversifying its economy beyond mining.

Botswana offers a stable investment climate characterized by its upper middle-income status and a strong reliance on diamond mining, which constitutes over 80% of its export earnings. The country maintains a favorable credit rating, with Standard & Poor’s rating it as "BBB+/A-2" and Moody’s affirming an A3 rating, indicating a robust macroeconomic environment and sound fiscal discipline. Additionally, Botswana promotes foreign direct investment through low tax rates, free repatriation of profits, and minimal foreign exchange controls, although challenges such as bureaucratic inefficiencies and perceptions of corruption in public procurement processes persist.