Issuance Of Guidance Note on the Application of Simplified Due Diligence Measures

The Non-Bank Financial Institutions Regulatory Authority (“the Authority” or “NBFIRA”), in its capacity as a supervisory authority under the Financial Intelligence Act, 2022 (“the FI Act”), hereby issues this communication to all supervised entities concerning the application of Simplified Due Diligence (SDD) measures.

This guidance note has been developed in furtherance of the Authority’s statutory mandate under section 49(1)(c) of the FI Act, which obligates supervisory authorities, in consultation with the Financial Intelligence Agency (FIA), to establish and issue guidance notes for the purpose of assisting specified parties in complying with the provisions of the Act.

The objective of this guidance note is to:

1. Clarify the circumstances under which SDD measures may be appropriately applied, consistent with the FI Act, its Regulations and the Financial Action Task Force (FATF) Recommendations.
2. Ensure a consistent and risk-based application of SDD measures across the non-bank financial sector, while safeguarding the integrity of the financial system against money laundering, terrorism financing, and proliferation financing risks.
3. Assist supervised entities in strengthening their internal AML/CFT policies, procedures, and controls, by providing practical direction on how SDD measures should be calibrated and implemented in line with the risk profile of customers, products, and services.
4. Promote compliance culture and accountability, by reminding Principal Officers and Compliance Officers of their statutory responsibilities under the FI Act and their duty to demonstrate effective application of customer due diligence (CDD) measures, including where simplified measures are permissible.

Download Guidance Note Here (PDF)

Supervised entities are reminded that SDD does not equate to an exemption from CDD obligations. Rather, it permits a proportionate adjustment in the scope, timing, or degree of identification and verification measures where lower risk has been demonstrably established, in line with the risk-based approach.

Accordingly, all supervised entities are required to:

• Review and align their AML/CFT compliance frameworks with this guidance note;
• Ensure that any application of SDD measures is supported by documented risk assessments;
• Maintain adequate records evidencing the rationale for applying SDD; and
• Make such records available to the Authority upon request.

The Authority expects full adherence to this guidance note and reserves the right to take regulatory action against any entity found to be misapplying SDD measures or failing to demonstrate compliance with the FI Act and its attendant obligations.

The guidance note is hereby issued with effect from October 2, 2025 and shall form part of the Authority’s compliance expectations applicable to all non-bank financial institutions under its supervision.

For further clarifications, Compliance Officers and Principal Officers are encouraged to engage directly with the Authority’s AML/CFT Department on amlcft@nbfira.org.bw.

Download Guidance Note Here (PDF)

Yours sincerely,

Mooketsi Ramanteba
Director – AML/CFT