The Proceeds of Serious Crime Act, in section 14, provides that;
Integration: This is the ultimate introduction of money into the legitimate financial system where the criminal believes it would no longer be possible or easy to associate the money with the underlying criminal offense.
However, these stages are not mutually exclusive and need not happen simultaneously for the offense of money laundering to be committed. In other words, any one of the above activities can amount to money laundering, hence the Proceeds of Serious Crime Act definition.
The United Nations Office on Drugs and Crime illustrates a typical money Laundering Cycle as follows
Source: The United Nations Office on Drugs and Crime
Money laundering is bad for Botswana because it significantly undermines economic development. If Botswana does not deal effectively with organised crime and money laundering, the country will be regarded by its counterparts as a money laundering haven that attracts and harbours criminals who are intent on hiding and laundering proceeds of their criminal activities. Botswana’s Financial institutions will be associated with criminal activity and will suffer loss of public confidence. Legitimate businesses will be undermined by unfair competition from businesses sponsored with proceeds of crime. In turn the country will suffer loss of investor confidence that will subsequently undermine the country’s economic diversification efforts. Being associated with money laundering can result in loss of donor funding because the country will be regarded as a country that aids and supports criminals and criminal activities. If the country loses donor funding and Foreign Direct Investment, its efforts to attain the Millennium Development Goals and achieve the National Vision 2016 objectives will be serious hindered.
- Organisations must put in place Know Your Customer (KYC) checks and procedures; and
- They must actively look for “Red Flags” that signify money laundering. Red flags are those elements in a transaction, pattern of transactions (such as unusual transactions, large cash payments and movements for funds that have no real logic), and/or customer profile or customer’s activities that may indicate possible laundering activity.
Many laundering procedures are dependent on employees identifying suspicions of money laundering and reporting these suspicions to relevant authorities, in this case to the Financial Intelligence Agency.