Peo Legal

Newsflash: GABCON reaches a compromise with the Competition and Consumer Authority

May 17, 2021 By Peo Legal

The Competition and Consumer Authority Botswana (CCAB) has entered into a settlement Agreement with Gaborone Container Terminal (Proprietary) Limited (GABCON) in a matter before the Competition and Consumer Tribunal. In this matter, GABCON was charged with contravention of Section 31(1) of the Competition Act 2018 (the Act) which deals with the abuse of dominance. GABCON has since admitted to engaging in abusive conduct through anti-competitive practices and has made commitments to ensure compliance with the aforesaid section of the Act. "

GABCON is a joint venture between Botswana Railways Organisation and Transnet licensed to carry on the business of a dry port and container depot in Botswana. GABCON facilitates the movement of containers by rail to and from the South African seas and dry ports linking to the rest of the world’s international ports. In the business of haulage or delivery of containers from the GABCON facilities to the customers’ premises, GABCON is subject to competition from private hauliers.

In 2017, the CCAB received a complaint from a group of private hauliers alleging that GABCON had imposed restrictions preventing them from efficiently servicing their customers and effectively forcing them out of business. The allegation was that GABCON revised its transport and delivery policies such that every transporter entering the GABCON facilities was required to have a permit and to pay an entrance fee.

In their investigations, the CCAB established that the private haulier trucks collecting containers at GABCON were subjected to several anti-competitive requirements which were detrimental to their businesses including:

the introduction of the 75/25% rule which meant that only 25% of the containers was allocated to private hauliers; and
imposing stringent conditions on private hauliers which included excessive prices and use of permits to access the facility.

According to the investigations of the CCAB, GABCON was contravening the Act by engaging in conduct amounting to abuse of dominance through refusal to deal and excessive pricing behaviour.

The parties have entered into a settlement agreement in terms of which:

GABCON has made commitments that it will desist from all anti-competitive practices.
Private hauliers will be consulted regarding any increase in access fees before such increments are operational.
GABCON will revise its policy on the registration of trucks, trailers, and drivers to ensure that it is compliant with prevailing competition laws.
GABCON will cease and desist from imposing the 25/75% restriction and implement a policy which is compliant with the prevailing competition laws.
GABCON will develop, implement, and monitor a competition law compliance programme incorporating corporate governance designed to ensure that its employees and agents do not engage in future contraventions of the Act.
GABCON will submit a copy of a compliance programme to the authority within 30 days of the date of the Confirmation of the settlement agreement.

For assistance with any matter relating to the Competition Act, 2018 and compliance matters please contact us on +267 397 5779 or info@peolegal.co.bw

Source: Competition & Consumer Authority-Botswana

The information contained in this newsflash was intended for our clients and correct to the best of the authors knowledge at the time of publication. Before making any decision or taking any action, you should consult the contacts listed here.

Legislative Updates: Trade Act, 2020

June 9, 2020 By Peo Legal

As of the 1^st of June 2020, the new Trade Act No. 25 of 2019 and the Trade Regulations of 2020 (the New Trade Act) came into operation and revoked the Trade Act of 2008 and the Trade Regulations of 2011 (the Old Trade Act), as announced by Botswana’s Minister of Investment, Trade and Industry, Honourable Peggy Serame. The key amendments are as follows:

No.	New Trade Act	Old Trade Act
Penalties for trading without a requisite licence.
1.	A fine not exceeding P50,000.00 and/or imprisonment for a term not exceeding five years.	A fine not exceeding P10,000.00 and/or imprisonment for a term not exceeding three years.
New Definitions
2.	“agent” shall mean a business which supplies goods for sale but does not keep any stock.	“agent” meant a business which negotiated contracts between parties for the sale of goods.
3.	“wholesale” means a store which sells goods in bulk per product or line item but does not include imported pre-owned earth moving equipment, heavy duty machinery, tractors and motorcycles.	“wholesale” meant a store of at least 1 500 square metres, which sold goods in bulk per product or line item.
4.	A distributor shall carry out it’s business from a warehouse of at least 75 square metres.	A distributor could carry out his business from a 100 square metres warehouse.
Licences and business registration no longer regulated by the Trade Act
5.	“motor dealer” and “petrol filling station” were deleted from the New Trade Act, effectively, the two trades shall not be regulated under the New Trade Act.
Licences removed from the reservation list
6.	General clothing licence
Licences attached to premises
7.	All licences and business registration certificates shall be attached to the fixed premises specified on the licence.	The following licenced or registered businesses previously attached to the applicant shall be attached to the fixed premises: Auctioneer, distributor, driller, industrial hardware licence, imported pre-owned motor dealer and take away.
Application fee
8.	Application fee shall be a non-refundable fee of P200.00.	Application fee was a non-refundable fee of P100.00.

For purposes of complying with the New Trade Act, we are available to assist with:

exemption applications in respect of reserved trades;
licences and business registration certificate applications; or
transfer of a trade licence or business registration certificate.

For further information or enquiry, please do not hesitate to contact Olorato at olorato@peolegal.co.bw or +267 397 5779.

Legal Compliance: Is Your Business Susceptible to Money Laundering?

May 25, 2020 By Peo Legal

Botswana was recently blacklisted by the European Union (EU) due to its shortfalls in anti-money laundering and terrorist financing prevention. The effect of the blacklisting may be that:

Botswana is deemed a high-risk country;
investors may opt to de-risk and terminate business relations with Botswana and related entities; and
all businesses in Botswana are subjected to enhanced customer due diligence processes before they can participate in international investments.

Botswana enacted the Financial Intelligence Act of 2019 (FIA) for purposes of compliance with the Financial Action Task Force Recommendations of 2012. Though FIA is robust and progressive, the challenge has been implementation and adoption of FIA requirements across sectors.

FIA requires non-banking financial institutions, societies, banks, professional practitioners and all entities registered, incorporated or licenced under any law to conduct Customer Due Diligence (CDD) on potential clients, an aspect of which is commonly known as ‘Know-Your-Customer’ (KYC). KYC is an integral component of anti-money laundering (AML) measures recommended in terms of FIA. KYC is the means of identifying and verifying the identity of a customer/client and their source of funds. At minimum, businesses are required to:

establish and verify the identity of a customer;
establish and verify the identity of the beneficial owner;
enquire and understand the anticipated purpose and intended nature of the transaction; and
obtain approval of senior management especially when dealing with a high-risk customer/client.

All businesses in Botswana must develop a KYC process which allows them to identify and report all suspicious transactions to the Financial Intelligence Agency. The KYC process must be conducted when a business:

establishes a new business relationship or concludes a transaction with a customer;
carries out a transaction in excess of BWP10 000.00;
when there is doubt about the veracity or adequacy of previously obtained customer identification data; or
where there is a suspicion of a commission of a financial offence.

KYC process must be undertaken on a continuous basis. An AML policy and the KYC process are crucial for effective risk management and compliance with anti-money laundering and combating of financial crimes as prescribed by FIA. Any business that fails to conduct CDD is liable to a fine of BWP1 000 000.00.

If you have any questions on the above and need assistance in reviewing your KYC process, CDD protocols, AML policy and / or creating a one, please feel free to contact Olorato Plaatjie at olorato@peolegal.co.bw or alternatively call +267 3975779.

Corona-virus (Covid-19) Legal Updates – Variation of Terms and Conditions of Employment

May 12, 2020 By Peo Legal

Following the declaration by the World Health Organisation of the Covid-19 pandemic as a public health emergency the Government has implemented a six-month state of emergency effective 2^nd April 2020 (the SOE). During the SOE a national lockdown has been declared and this has had an impact on Botswana’s economy. Economist Dr. Keith Jeffries, has opined that as a result of the lockdown, Botswana’s economy has lost BWP10.8 Billion and this economic slowdown has affected households, businesses and Government. Businesses ability to fully operate and generate revenue is under strain. Under normal circumstances, most businesses would reduce their workforce through either terminations or retrenchment. However, in terms of the Emergency Powers Covid-19 Regulations 2020 (Emergency Powers Regulations) employers are not allowed to terminate or retrench employees under the SOE.

In terms of the Emergency Powers Regulations movement of persons has been restricted resulting in the suspension of business operations and/or reduced revenues. To counter the adverse economic effects, businesses have amongst other things:

reduced employee salaries;
forced employees to take unpaid leave; and
reduced working hours and/or implemented shift working hours.

All of the above and/or related examples where the employer has unilaterally amended the essential nature of a contract of employment is a variation of terms and conditions of employment. In order for such variation to be valid the variation must be done lawfully. In terms of the law, an employer is not allowed to unilaterally amend an employee’s terms and conditions of employment unless:

there are sound commercial reasons for doing so; and
the employer has negotiated the matter in good faith through a fair procedure, which requires prior consultation with employees.

If an employer changes terms and conditions unilaterally and without following the above procedure, the employee has an election either to resile from the contract or to sue for damages in terms of the contract. Subject to complying with the above, management retains the prerogative to make the final decision as regards to changes to terms and conditions of employment if the parties cannot agree to such changes.

Considering the impact the SOE will have on a business’s ability to normally function we recommend that you seek legal advice on how to effectively and lawfully vary an employee’s terms and conditions of employment.

Feel free to contact me on tebogo@peolegal.co.bw or alternatively call +267 397 5779 if you any questions on the above.

Trust Property Control Act

March 21, 2019 By Peo Legal

TRUST PROPERTY CONTROL ACT No. 11 of 2018

This article is for you if:

You have a sizable estate with property
You desire to create or change your will
You conduct or desire to carry out charitable work

Trusts have since time immemorial been recognised by law as separate legal entities and are most commonly utilised for testamentary dispositions of property where there is more than once beneficiary to a deceased’s estate, as well as for charitable purposes. In terms of entities formed for charitable purposes whilst there are other entities that can be incorporated, establishing a Trust was often preferred as the incorporation and filing requirements were not as onerous as for Societies or Companies Limited by Guarantee. Trusts are established by a trust instrument, commonly referred to as a Trust Deed, which appoints a trustee as well as allocates property to be held in the Trust, which property is held for the benefit of beneficiaries.

This Act commenced on 28^th June 2018 and governs the creation and administration of Trusts in Botswana. Priorly governed by the common law, the Act codifies various principles relating to Trusts and creates registration and on-going filing requirements to be administered by the office of the Master of the High Court. In terms of on-going filing requirement, since the introduction of the Act these still remain fairly minimal. The Act requires all trust instruments to be registered with the Master of the High Court, who is also responsible for maintaining a register of trustees. It is notable that the definition of “Trust Instrument” does not require a trust instrument to take a specific form and includes “a written agreement, testamentary writing, court order or a notarial deed according to which a trust is created”. The inclusion of “testamentary writing” means that a will can establish a Trust if it contains a clause which creates the Trust after the passing of the deceased, whilst previously this was not possible.

All Trusts established prior to the commencement of the Act have been given until 28 December 2018 to be validated by registration with the Master. Failure to validate Trusts will attract sanctions in the form of a fine or imprisonment. Any changes to Trust instruments will also need to promptly be notified to the Master. Trustees are required to be confirmed by the Master in writing and are also required to furnish security to the satisfaction of the Master since the introduction of the Act. The Act clearly identifies the duties of trustees, both when the Trust is in existence as well as post-termination and regulates other matters like their appointment, remuneration, resignation and removal from office. The Act also introduces identification requirements for Trust property, to ensure that it is easily identifiable and does not constitute an asset owned by a trustee in his/her personal capacity. All Trusts that have been established prior to the commencement of the Act have been given until May 2019 to ensure that Trust property is properly registered and identified.

Despite the Act having introduced more stringent requirements for the establishments of Trusts in Botswana, the limitation on powers of trustees and recourse available to beneficiaries in instances of abuse of power by trustees, increase confidence in the establishment of Trusts for purposes of property management in the country.

Contact Us and we will help you set up your trust.