Standard Bank was slapped with a financial penalty of R30 million and a directive to take remedial action for failure to comply with suspicious and unusual transaction reporting requirements. Photo: Supplied

JOHANNESBURG – The SA Reserve Bank has imposed administrative sanctions on five banks and directed them to take remedial actions after it found weaknesses in each of the banks’ money laundering control measures following routine inspections conducted in terms of the Financial Intelligence Centre (FIC) Act.

The Reserve Bank said in a statement on Friday that the five banks were the Standard Bank South Africa, GroBank (formerly known as The South African Bank of Athens Limited), Ubank, Bank of China, Johannesburg Branch and HBZ Bank.

Standard Bank SA said on Friday that it had taken immediate action to address the issues identified by the Reserve Bank and progress was tracked and reported to the central bank on a regular basis. 

"Standard Bank SA is committed to complying with all its regulatory requirements as prescribed by the relevant authorities. As acknowledged in the Reserve Bank’s statement, the administrative sanction is not an indication that Standard Bank SA has facilitated transactions involving money laundering or the financing of terrorism," the bank said.

The FIC Act mandates the Prudential Authority (PA) to supervise and enforce compliance with the provisions of the FIC Act for accountable institutions (AIs) it supervises. Flowing from these responsibilities, the PA, among others, inspects AIs to assess whether they have appropriate and adequate measures and money laundering/terrorist financing controls in place that would enable them to effectively comply with the provisions of the FIC Act.

“It should be noted that the administrative sanctions were imposed because of weaknesses identified in banks’ compliance with the provisions of the FIC Act, and not because the said banks were found to have facilitated transactions involving money laundering or the financing of terrorism,” reads the statement.

The administrative sanctions imposed in terms of section 45C (3) of the FIC Act are as follows:

Standard Bank of South Africa

A financial penalty of R30 million and a directive to take remedial action for failure to comply with suspicious and unusual transaction reporting requirements in terms of regulation 24(3) read with regulation 29(7) of the Money Laundering and Terrorist Financing Control Regulations of the FIC Act.

R7.5 million of the R30 million financial penalty is, however suspended, in terms of section 45C(4)(c) of the FIC Act, for a period of three (3) years from 25 September 2019, subject to Standard Bank of South Africa Limited adhering to certain conditions imposed by the SARB.

GroBank (formerly known as South African Bank of Athens)

A financial penalty of R5 million and a caution not to repeat the conduct which led to non-compliance in the following areas:

  • failure to comply with cash threshold reporting requirements in terms of section 28 of the FIC Act;
  • failure to comply with suspicious and unusual transactions reporting requirements in terms of section 29 of the FIC Act; and
  • failure to comply with the training requirements in terms of section 43(a) of the FIC Act. 

The financial penalty of R5 million is, however suspended, in terms of section 45C(4)(c) of the FIC Act, for a period of three (3) years from 13 August 2019, subject to GroBank Limited adhering to certain conditions imposed by the SARB.

Bank of China – Johannesburg Branch

A financial penalty of R2 million and a directive to take remedial action for failure to comply with cash threshold reporting requirements in terms of section 28 of the FIC Act.

The financial penalty of R2 million is, however suspended, in terms of section 45C(4)(c) of the FIC Act, for a period of three (3) years from 21 August 2019, subject to Bank of China - Johannesburg Branch adhering to certain conditions imposed by the SARB.

Ubank

A financial penalty of R500 000 and a directive to take remedial action for failure to comply with the cash threshold reporting requirements in terms of section 28 of the FIC Act.

A caution not to repeat the conduct which led to non-compliance, and a reprimand  are the administrative sanctions imposed for deficiencies relating to section 43(a) and section 43(b) of the FIC Act respectively (training and monitoring of compliance).

HBZ Bank

A caution not to repeat the conduct which led to non-compliance was imposed for failure to comply with suspicious and unusual transaction reporting requirements in terms of regulation 24(3) read with regulation 29(7) of the Money Laundering and Terrorist Financing Control Regulations of the FIC Act, and for the failure to comply with training requirements in terms of section 43(a) of the FIC Act.

The five banks are cooperating with the SARB and have agreed to the necessary measures to address the identified compliance deficiencies and control weaknesses.

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