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KwaZulu-Natal - Some banks and other financial institutions are likely to land in hot water for allowing themselves to be used by criminals for money laundering, says an expert.
“It is anticipated that there will be fines and it is only a matter of time before this is disclosed,” said Roy Melnick, an associate director of PwC Advisory Services, who gave a presentation about regulatory developments in the financial world in Durban yesterday.
It did not have to be proved that the offending banks were used to launder money, just that their controls were so lax that there was the potential for it to happen, Melnick explained.
Inspections are under way by regulators and supervisory bodies, which were checking and testing banks and institutions to see whether their anti-money-laundering controls were adequate and effective in terms of regulations.
An administrative fine could cost R50 million, while a criminal penalty could set back banks R100m and involve a 15-year jail term for errant officials, Melnick said.
Melnick, chairman of the South African branch of the Association of Certified Anti-Money Laundering Specialists, was giving a presentation to PwC clients about trends in the wake of recent international banking scandals.
London-based HSBC, Europe’s biggest bank, has been slammed by the US Senate for letting clients shift potentially illicit funds from several countries, and the fine is likely to cost the bank more than $1.5 billion (R13bn).
The HSBC case was a lesson for everyone in the financial world, Melnick said.
Criminals – at home and abroad – were “on duty” 24 hours a day, looking for ways to outfox and use banks and other institutions to launder the proceeds of their ill-gotten gains, he said. - Daily News