US embassy cable - 01GABORONE3517

UNCLAS SECTION 01 OF 04 GABORONE 003517 
 
E.O. 12958: N/A 
TAGS: ETTC, EFIN, PREL, PTER, BC 
SUBJECT: BOTSWANA: TREASURY DEPARTMENT REQUEST FOR 
INFORMATION 
 
REF:  (A) STATE 185882, (B) GABORONE 3458, (C) GABORONE 
3343, (D) GABORONE 3456, (E) MORROW-HOFFMAN EMAIL 10-30- 
2001 
 
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SUMMARY 
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1.  THE GOB HAS TAKEN SIGNIFICANT STEPS TO ENSURE THAT 
ITS FINANCIAL SYSTEM DOES NOT BECOME A HAVEN FOR ILLEGAL 
FINANCIAL TRANSACTIONS, WHETHER MONEY LAUNDERING, DRUG 
TRAFFICKING, OR TERRORIST FINANCING.  WHILE WE STILL HAVE 
CONCERNS ABOUT VARYING LEVELS OF IMPLEMENTATION BY THE 
DIFFERENT AGENCIES INVOLVED, WE ARE CONFIDENT THAT THE 
MECHANISMS INVOLVED, BOTH THOSE PRE-EXISTING AND THOSE 
UNDER DEVELOPMENT, WOULD BE SUFFICIENT TO IDENTIFY AND TO 
BLOCK TERRORIST' ACCESS TO FINANCING IN BOTSWANA.  END 
SUMMARY. 
 
++++++++++ 
 
2.  THE FOLLOWING CONSTITUTES OUR ANSWERS TO THE 
QUESTIONS PRESENTED IN REF A.  AS FURTHER INFORMATION 
DEVELOPS, WE WILL UPDATE THESE ANSWERS.  ALL DOCUMENTS 
REFERRED TO BELOW ARE BEING SENT TO THE TREASURY 
DEPARTMENT'S FOREIGN LAW UNI VIA EXPRESS COURIER (REF E). 
 
A.  THE GOB HAS BEEN PUBLICLY SUPPORTIVE OF GLOBAL 
COALITION EFFORTS AGAINST TERRORISM, INCLUDING FINANCIAL 
MEASURES.  THE GOVERNOR OF THE BANK OF BOTSWANA (BOB) 
BOTSWANA'S CENTRAL BANK, ISSUED A LETTER OCTOBER 8 TO ALL 
BANKS IN BOTSWANA OUTLINING EXECUTIVE ORDER 13224, 
DIRECTING THAT CONSTITUENT BANKS HALT PAYMENT AND/OR 
TRANSFER OF FUNDS TO OR FOR ACCOUNTS OF ANY PERSON LISTED 
BY SUCH ORDER.  BOB DIRECTOR OF FINANCIAL INSTITUTIONS 
MOSES PELAELO ISSUED A FOLLOW-UP LETTER OCTOBER 17 WHICH 
PROVIDED THE UPDATED LIST OF ENTITIES AND INDIVIDUALS 
WHOSE ASSETS ARE TO BE BLOCKED. 
RELEVANT TEXT OF THE LETTERS FOLLOWS: 
 
++++++++++ 
 
OCTOBER 8, 2001 
 
THIS IS TO REMIND YOU THAT BOTSWANA IS A SIGNATORY TO THE 
INTERNATIONAL CONVENTION ON THE SUPPRESSION OF THE 
FINANCING OF TERRORISM AND OTHER ANTI-TERRORISM 
CONVENTIONS.  THIS MEANS THAT ALL FINANCIAL INSTITUTIONS 
IN BOTSWANA, PUBLIC AND PRIVATE, ARE EXPECTED TO TAKE ALL 
MEASURES TO ENSURE THAT THEY DO NOT UNWITTINGLY PROVIDE 
SAFE HARBOR FOR TERRORIST ACTIONS OR ACTIVITIES.  THIS 
FOLLOWS THE SIGNING OF THE EXECUTIVE ORDER BY THE 
PRESIDENT OF THE UNITED STATES OF AMERICA, WHICH PROVIDES 
FOR BLOCKING PROPERTY AND INTERESTS IN PROPERTY OF 
PERSONS WHO HAVE COMMITTED OR POSE A SIGNIFICANT RISK OF 
COMMITTING ACTS OF TERRORISM. 
 
PLEASE FIND ATTACHED HEREWITH THE PAPER ON THE US 
EXECUTIVE ORDER AS WELL AS AN ANNEX DETAILING PERSONS 
WHOSE INTERESTS HAVE BEEN SPECIFICALLY DESIGNATED, THUS 
FAR, BY THE US GOVERNMENT.  ACCORDINGLY, WITH IMMEDIATE 
EFFECT, NO PAYMENT AND/OR TRANSFER OF FUNDS TO, OR FOR 
ACCOUNTS OF ANY PERSONS LISTED THEREIN ARE PERMITTED, 
WITHOUT THE PRIOR WRITTEN APPROVAL BY THE GOVERNMENT OF 
BOTSWANA. 
 
++++++++++ 
 
OCTOBER 17, 2001 
 
INTERNATIONAL CONVENTION FOR THE SUPPRESSION OF THE 
FINANCING OF TERRORISM 
 
FURTHER TO THE GOVERNOR'S LETTER OF OCTOBER 8, 2001 ON 
THE ABOVE, PLEASE FIND HEREWITH AN UPDATED LIST OF 
ENTITIES AND INDIVIDUALS WHOSE FINANCIAL ASSETS ARE TO BE 
BLOCKED. 
 
ACCORDINGLY, WITH IMMEDIATE EFFECT, NO PAYMENT AND/OR 
TRANSFER OF FUNDS TO OR FOR ACCOUNT OF ANY PERSON LISTED 
IN ANNEXURE I SHALL BE PERMITTED, WITHOUT THE PRIOR 
APPROVAL BY THE GOVERNMENT OF BOTSWANA. 
 
++++++++++ 
 
B. BOB ADVISOR (AND FORMER FEDERAL RESERVE BANK OF 
CHICAGO EMPLOYEE) JOHN MONTGOMERY EXPLAINED TO US ON 
OCTOBER 29 THAT THE LETTERS QUOTED ABOVE DO NOT RISE TO 
THE LEVEL OF A FREEZE ORDER.  A FREEZE ORDER WOULD NEED 
TO COME FROM THE ATTORNEY GENERAL'S OFFICE OR FROM A 
COURT OF COMPETENT JURISDICTION, DIRECTING ACTION AGAINST 
A SPECIFIC ACCOUNT, ENTITY, PERSON, OR INSTITUTION, HE 
SAID.  OUR PRESUMPTION IS THAT, SHOULD A FINANCIAL 
INSTITUTION REPORT TO THE BOB THE EXISTENCE OF SPECIFIC 
ACCOUNTS, ATTORNEY GENERAL ACTION WOULD FOLLOW, BUT THAT 
PRESUMPTION HAS NOT BEEN TESTED. 
 
C.  THE GOB HAS THUS FAR BLOCKED NO ASSETS UNDER THIS 
ORDER, NOR HAS ANY BANK THUS FAR REPORTED THE EXISTENCE 
OF ACCOUNTS BEING HELD BY ANY OF THE ENTITIES MENTIONED 
IN THE ANNEX AND UPDATE TO E.O. 13324. 
 
D. 
 
(I)  WE ARE STILL TRYING TO ASCERTAIN WHETHER A UN 
SECURITY COUNCIL RESOLUTION, SUCH AS UNSCR 1267 OR 1373, 
IS REQUIRED BEFORE ASSETS MAY BE FROZEN UNDER BOTSWANA 
LAW.  THE ABOVE OCTOBER 8 AND OCTOBER 17 LETTERS NOTE 
THAT BOTSWANA IS A SIGNATORY TO THE INTERNATIONAL 
CONVENTION ON THE SUPPRESSION OF THE FINANCING OF 
TERRORISM AND OTHER ANTI-TERRORISM CONVENTIONS.  BOB 
ISSUED THE LETTERS DIRECTING NO FURTHER TRANSFERS OR 
PAYMENTS TO THE LISTED PERSONS OR ENTITIES UNDER THEIR 
OBLIGATIONS PURSUANT TO THAT AUTHORITY.  FURTHER LEGAL 
ACTION AGAINST THE ACCOUNTS OR THEIR HOLDERS WOULD BE THE 
PURVIEW OF THE ATTORNEY GENERAL'S OFFICE. 
 
(II)  WE ARE STILL TRYING TO ASCERTAIN HOW UN SECURITY 
COUNCIL 1373 WILL BE IMPLEMENTED IN THE ABSENCE OF SUCH 
LISTS.  MFA PERMANENT SECRETARY MPOFU IS CHAIRING AN AD 
HOC INTER-AGENCY COMMITTEE TASKED WITH IMPLEMENTING UNSCR 
1373.  (REF D).  THE BANK OF BOTSWANA HAS ALREADY 
DIRECTED BOTSWANA BANKS NOT TO ACT ON ANY ACCOUNTS HELD 
BY PERSONS MENTIONED IN THE ANNEX TO E.O. 13324 AND ITS 
UPDATE THROUGH THE LETTERS ABOVE. 
 
(III)  WE ARE STILL TRYING TO ASCERTAIN WHETHER A LIST 
ADOPTED BY A MULTILATERAL BODY OTHER THAN THE UN SECURITY 
COUNCIL IS REQUIRED FOR SUCH FREEZING.  AS BOB ADVISOR 
MONTGOMERY INDICATED, FREEZING ACCOUNTS IN BOTSWANA CAN 
ONLY OCCUR PURSUANT TO ATTORNEY GENERAL ACTION OR BY A 
COURT OF COMPETENT AUTHORITY, AND CAN ONLY BE DIRECTED AT 
A SPECIFIC ACCOUNT.  (NOTE:  BOTSWANA IS A MEMBER OF THE 
FINANCIAL AFFAIRS TASK FORCE (FATF) OF COMMONWEALTH 
COUNTRIES, BUT IT IS UNCLEAR WHETHER THE FATF WOULD HAVE 
DIFFERENT AUTHORITY OR IMPOSE DIFFERENT REQUIREMENTS THAN 
THOSE BY THE UN SECURITY COUNCIL.  END NOTE.) 
 
(IV)  THE BANKING ACT OF 1995 DOES NOT EXPRESSLY MENTION 
THE AUTHORITY TO FREEZE TERRORIST-RELATED OR TALIBAN- 
RELATED ASSETS.  PURSUANT TO ITS OBLIGATIONS UNDER THE 
INTERNATIONAL CONVENTION ON THE SUPPRESSION OF THE 
FINANCING OF TERRORISM AND OTHER ANTI-TERRORISM 
CONVENTIONS, THE BOB ISSUED THE LETTERS ABOVE DIRECTING 
BANKS TO CEASE ACTION ON ANY ACCOUNTS HELD BY PERSONS 
MENTIONED IN THE ANNEX AND UPDATE TO E.O. 13324. 
 
E.  WE HAVE BEEN TOLD BY THE MFA THAT IMPLEMENTING 
LEGISLATION IS REQUIRED TO INCORPORATE MANDATORY UN 
SECURITY COUNCIL RESOLUTIONS INTO BOTSWANA LAW. 
INTERNATIONAL TREATIES ARE NOT AUTOMATICALLY INCORPORATED 
INTO BOTSWANA LAW; THEY ARE DEEMED RATIFIED ONLY UPON 
SIGNATURE BY BOTSWANA'S PRESIDENT.  AFTER RATIFICATION, 
THEN THE MINISTRY WITH LOCAL JURISDICTION OVER THE TREATY 
IN QUESTION, IN COORDINATION WITH THE ATTORNEY GENERAL'S 
OFFICE, WILL IMPLEMENT CHANGES TO BOTSWANA LAW TO 
ACCOMMODATE THE OBLIGATIONS STEMMING FROM THE TREATY IN 
QUESTION. 
 
F.  AS BOB'S MONTGOMERY INDICATED, FREEZING ACCOUNTS IN 
BOTSWANA CAN ONLY OCCUR PURSUANT TO ATTORNEY GENERAL 
ACTION OR BY A COURT OF COMPETENT AUTHORITY, AND CAN ONLY 
BE DIRECTED AT A SPECIFIC ACCOUNT.  PURSUANT TO ITS 
OBLIGATIONS UNDER THE INTERNATIONAL CONVENTION ON THE 
SUPPRESSION OF THE FINANCING OF TERRORISM AND OTHER ANTI- 
TERRORISM CONVENTIONS, THE BOB ISSUED THE LETTERS ABOVE 
DIRECTING BANKS TO CEASE ACTION ON ANY ACCOUNTS HELD BY 
PERSONS MENTIONED IN THE ANNEX AND UPDATE TO E.O. 13324. 
 
G.  IF THE USG WERE TO PROVIDE SPECIFIC ACCOUNT/ACCOUNT 
HOLDER/FINANCIAL INSTITUTION INFORMATION, IT APPEARS 
POSSIBLE THAT THE AG'S OFFICE COULD ISSUE A FREEZE ORDER. 
ABSENT THAT, THE GOB COULD BLOCK ALL TRANSACTIONS TO ANY 
CATEGORY OF ACCOUNTS IMMEDIATELY, AND SUBSEQUENTLY MOVE 
TO FREEZE INDIVIDUAL ACCOUNTS ONCE IDENTIFIED. 
 
H.  BOB FINANCIAL INSTITUTIONS DEPUTY DIRECTOR NCUBE ON 
OCTOBER 29 GAVE US THREE DOCUMENTS WHICH THE GOB CREATED 
PRIOR TO SEPTEMBER 11 TO AUGMENT ITS EFFORTS IN TRACKING 
ILLEGAL FINANCIAL ACTIVITY: "DIRECTIVE BOB 3/2001: 
GUIDELINES FOR AN ANTI-MONEY LAUNDERING PROGRAM"; AN 
"EXAMPLES OF SUSPICIOUS ACTIVITY" HANDOUT; AND A 
"SUSPICIOUS ACTIVITY REPORT" FORM FOR NOTICE AND COMMENT 
TO BANKS IN BOTSWANA.  THESE DOCUMENTS, CURRENTLY BEING 
CURCULATED TO BANKS IN BOTSWANA FOR COMMENT, WILL BE 
INCORPORATED AS DIRECTIVES INTO REQUIREMENTS FOR BANKS IN 
BOTSWANA TO REPORT MONEY-LAUNDERING ACTIVITIES, AS PER 
SECTION 21(4) OF THE BANKING ACT OF 1995.  BOB'S TARGET 
DATE FOR IMPLEMENTING THESE DIRECTIVES IS JANUARY 2002. 
 
(I)  WE BELIEVE THE ACTIONS TAKEN BY THE BOB OCTOBER 8 
AND OCTOBER 17 CONSTITUTE THEIR RESPONSE TO FINANCIAL 
REQUIREMENTS OF THE RESOLUTIONS. 
 
(II) BOB OFFICIALS REPORT NO TERRORIST ASSETS HAVE BEEN 
LOCATED, AND THEREFORE NO FINANCING HAS BEEN FROZEN, 
UNDER UNSCR 1267, 1333, OR 1373. 
 
I.  PLEASE SEE ANSWER TO H. ABOVE. 
 
J.  ON NUMEROUS OCCASIONS, THE GOB HAS VOICED ITS 
"UNQUALIFIED SUPPORT" IN OUR EFFORTS TO COMBAT TERRORISM. 
(REF D).  PRESIDENT MOGAE GAVE SPECIFIC EXAMPLES OF HOW 
BOTSWANA'S LAWS ARE ALREADY DESIGNED TO THWART ILLEGAL 
FINANCIAL ACTIVITY, INCLUDING TERRORIST FINANCING (REF 
C).  FOREIGN MINISTER MERAFHE HAS ASSURED US THAT 
BOTSWANA WILL BE FULLY COMPLIANT WITH THE REQUIREMENTS OF 
UNSCR 1373 (REF C).  WE RECENTLY SENT A DIPLOMATIC NOTE 
TO THE MFA NOTING THAT WE WOULD WELCOME ANY INFORMATION 
IT CAN PROVIDE PRIOR TO THE REQUIRED 90-DAY REPORT TO THE 
UN. 
 
K.  THE OCTOBER 17 LETTER QUOTED IN PARA (A) INCLUDED THE 
COMPLETE USG LISTS OF 39 NAMES. 
 
L.  THE BOB OWES NO DUTY OF CONFIDENTIALITY TO ACCOUNT 
HOLDERS.  SECTION 43(1) OF THE BANKING ACT OF 1995 
IMPOSES A DUTY OF CONFIDENTIALITY ON THE BANKS TO THEIR 
ACCOUNT HOLDERS IN BOTSWANA, SUBJECT TO CERTAIN 
EXCEPTIONS.  BANK OF BOTSWANA ACT SECTION 59, HOWEVER, 
NOTES THAT "FOR THE PURPOSES OF THE ADMINISTRATION OF 
THIS ACT AND IN THE PROPER PERFORMANCE OF ITS FUNCTIONS 
UNDER THIS ACT, THE BANK MAY CALL FOR SUCH INFORMATION AS 
IT MAY REQUIRE FROM ANY PERSON."  SECTION 60 STATES THAT 
"THE BANK (OF BOTSWANA) SHALL NOT BE SUBJECT TO ANY OF 
THE PROVISIONS APPLICABLE TO FINANCIAL INSTITUTIONS UNDER 
THE BANKING ACT. 
 
M.  COPIES OF ALL AVAILABLE LAWS AND THE LETTERS 
MENTIONED ABOVE ARE BEING SENT VIA EXPRESS COURIER TO THE 
TREASURY DEPARTMENT'S FOREIGN LAW UNIT.  THE PACKAGE WILL 
INCLUDE: 
 
  -- BANKING ACT OF 1995; 
 
  -- BANK OF BOTSWANA ACT OF 1996, INCLUDING ITS 1999 
     AMENDMENT; 
 
  -- BOTSWANA STOCK EXCHANGE ACT OF 1994; 
 
  -- COLLECTIVE INVESTMENT UNDERTAKINGS REGULATIONS, 
     1998; 
 
  -- FINANCE AND AUDIT ACT OF 1994, INCLUDING ITS 1997 
     AMENDMENT; 
 
  -- LETTER FROM BANK OF BOTSWANA GOVERNOR LINAH K. 
     MOHOHLO OF OCTOBER 8, 2001 TO BANKS AND BUREAUX 
     DE CHANGES ON RESPONSIBILITIES UNDER THE 
     INTERNATIONAL CONVENTION ON THE SUPPRESSION OF 
     THE FINANCING OF TERRORISM; AND 
 
  -- LETTER FROM BANK OF BOTSWANA FINANCIAL INSTITUTIONS 
     DIRECTOR MOSES PELAELO OF OCTOBER 17, 2001 TO BANKS 
     AND BUREAUX DE CHANGES ON UPDATED LIST OF ENTITIES 
     AND INDIVIDUALS WHOSE FINANCIAL ASSETS ARE TO BE 
     BLOCKED. 
 
N.  AGENCIES RESPONSIBLE FOR CARRYING OUT UN SECURITY 
COUNCIL RESOLUTIONS 1267, 1333, AND 1373 INCLUDE THE 
FOLLOWING: 
 
MINISTRY OF FOREIGN AFFAIRS - OVERALL COORDINATION OF 
RESPONSIBILITIES UNDER THE AD HOC COMMITTEE. 
 
CONTACT: 
 
MR. ERNEST MPOFU 
PERMANENT SECRETARY 
MINISTRY OF FOREIGN AFFAIRS 
PRIVATE BAG 00368 
GABORONE 
BOTSWANA 
TEL:  +267 360-0712 
FAX:  +267 313-366 
 
BANK OF BOTSWANA - MONITORING OF BANKS FOR SUSPICIOUS 
FINANCIAL TRANSACTIONS, VIA MONEY LAUNDERING, DRUG MONEY, 
OR TERRORIST FINANCING. 
 
CONTACT: 
 
MR. MOSES PELAELO 
DIRECTOR OF FINANCIAL INSTITUTIONS 
BANK OF BOTSWANA 
PRIVATE BAG 00154 
GABORONE 
BOTSWANA 
TEL:  +267 360-6368 
FAX:  +267 313-862 
 
DIRECTORATE ON CORRUPTION AND ECONOMIC CRIME (DCEC) - 
CHARGED WITH THE INVESTIGATION OF ALL FINANCIAL CRIMES IN 
BOTSWANA.  UPON CONCLUDING THAT A SUSPICIOUS TRANSACTION 
HAS BEEN CONDUCTED IN BOTSWANA, THE BANK OF BOTSWANA 
IMMEDIATELY TURNS OVER ALL INFORMATION TO THE DCEC TO 
CONDUCT THE INVESTIGATION. 
 
CONTACT: 
 
MR. TYMON KATHOLO 
DIRECTOR 
DIRECTORATE ON CORRUPTION AND ECONOMIC CRIME (DCEC) 
PRIVATE BAG 00344 
GABORONE 
BOTSWANA 
TEL:  +267 314-002 
FAX:  +267 313-508 
 
ATTORNEY GENERAL'S OFFICE - HANDLES COORDINATION OF LEGAL 
ISSUES BETWEEN OBLIGATIONS UNDER INTERNATIONAL LAW AND 
COMPLIANCE WITH BOTSWANA LAW. 
 
CONTACT:  TBD. 
 
O.  BOTSWANA IS A SIGNATORY AND HAS RATIFIED ALL TWELVE 
OF THE COUNTER-TERRORISM CONVENTIONS.  CONCERNING 
DOMESTIC LAW, AS INDICATED ABOVE, THE BOB HAS CREATED 
THREE DRAFT REGULATIONS TO AUGMENT CURRENT REGULATIONS ON 
MONEY-LAUNDERING.  THE REGULATIONS, "DIRECTIVE BOB 
3/2001:  GUIDELINES FOR AN ANTI-MONEY LAUNDERING 
PROGRAMME" (SIC); AN "EXAMPLES OF SUSPICIOUS ACTIVITY" 
HANDOUT; AND A "SUSPICIOUS ACTIVITY REPORT" FORM, HAVE 
BEEN MADE AVAILABLE TO BANKS IN BOTSWANA FOR COMMENT. 
UPON CONCLUSION OF THE PERIOD FOR COMMENT, THE 
REGULATIONS WILL BE FINALIZED AND ISSUED AS FURTHER 
DIRECTIVES TO SUPPLEMENT THE BANKING ACT SECTION 21(4)'S 
REQUIREMENT THAT "A BANK SHALL NOTIFY THE CENTRAL BANK OF 
ANY TRANSACTION BY ANY OF ITS CUSTOMERS WHICH IT SUSPECTS 
TO BE MONEY LAUNDERING." 
 
3.  COMMENT:  A NUMBER OF THESE ISSUES WILL REQUIRE 
FURTHER INFORMATION FROM THE ATTORNEY GENERAL'S OFFICE 
AND/OR THE MFA-CHAIRED INTER-AGENCY AD HOC COMMITTEE. 
MUCH OF THIS IS NEW GROUND FOR BOTSWANA'S FINANCIAL AND 
REGULATORY INSTITUTIONS.  HOWEVER, WE ARE CONFIDENT OF 
THE GOB'S WILL TO COOPERATE FULLY ON THESE ISSUES.  WE 
WILL CONTINUE TO RESEARCH THESE QUESTIONS, AND WILL 
PROVIDE PERIODIC UPDATES. 
 
LANGE