Stiff fines for companies lax on anti money laundering measures

26 March 2018 - 07:26 By Timeslive
South African Reserve Bank.
South African Reserve Bank.
Image: Google Maps

American Express and Forex World are amongst five companies saddled with fines after the South African Reserve Bank imposed administrative sanctions on authorised dealers in foreign exchange.

The administrative sanctions were imposed after the SARB conducted inspections at the five companies in terms of the Financial Intelligence Centre Act (FIC Act).

The Sarb said in a statement that inspections found weaknesses in the control measures the companies have in place to control anti-money laundering and combat the financing of terrorism.

The sanctions imposed on the companies are:

- Tourvest Financial Services (Pty) Limited trading as American Express Foreign Exchange Services

A directive that it implement adequate processes and working methods in relation to the sanction screening of clients to ensure that it complies with its reporting duties‚ in terms of section 28A of the FIC Act.

A financial penalty of R750‚000 for failing to report cash transactions above R24‚999.99 to the Financial Intelligence Centre‚ in terms of section 28 of the FIC Act. An amount of R250‚000 of the financial penalty is suspended for a period of 12 months‚ provided that there is no recurrence of the relevant compliance failure during the period of suspension.

A financial penalty of R80‚000 for failing to identify and verify clients’ details (better known as know your customer or KYC requirements)‚ in terms of section 21 of the FIC Act.

A financial penalty of R100‚000‚ 00 for failing to establish and verify another person’s authority to act on behalf of the client‚ in terms of section 21(1)(c)(ii) of the FIC Act.

- Forex World (Pty) Limited

A financial penalty of R260‚000 for failing to establish and verify clients’ details‚ as well as to establish and verify the authority granted to another person to act on behalf of the client.

A financial penalty of R100‚000 for failing to properly formulate and implement internal rules‚ or alternatively‚ to provide appropriate training to its employees to enable them to comply with the provisions of the FIC Act and the internal rules applicable to them. "The financial penalty is suspended in whole for a period of 12 months‚ provided that there is no recurrence of the relevant compliance failures during the period of suspension‚" the Sarb said.

A financial penalty of R50‚000 for failing to report cash transactions above R24‚999‚99 to the Financial Intelligence Centre within the prescribed period‚ in terms of section 28 of the FIC Act. This financial penalty is also suspended in whole for a period of 12 months‚ provided that there is no recurrence of the relevant compliance failure during the period of suspension.

- Ayoba Foreign Exchange (Pty) Limited

A financial penalty of R80‚000 for failing to establish and verify clients’ details.

A financial penalty of R50‚000 for failing to provide appropriate training to its employees to enable them to comply with the provisions of FIC Act and the internal rules applicable to them.

A financial penalty of R50‚000 for failing to appoint a person with the responsibility to ensure compliance by it and its employees with the provisions of the FIC Act.

A directive that it must‚ within 30 days‚ present a remedial action plan to the SARB‚ detailing the measures to be implemented to remedy and prevent the recurrence of non‑compliance with the provisions of the FIC Act. - Imali Express (Pty) Limited

A financial penalty of R100‚000 for failing to implement adequate processes and working methods in relation to the sanction screening of clients to ensure that it complies with its reporting duties.

A financial penalty of R50‚000 for failing to provide training to its employees to enable them to comply with the provisions of FICA and the internal rules applicable to them. The financial penalty is suspended in whole for a period of three months‚ on condition that the deficiency is satisfactorily remedied within the period of suspension. - Sikhona Forex (Pty) Limited

A caution not to repeat its failure to identity and verify corporate client’s details.

A financial penalty of R130‚000 for failing to: identify and verify clients’ details; and/or establish and verify the identity of that other person‚ where another person is acting on behalf of the client‚ in terms of section 21 of the FIC Act; and/or establish and verify another person’s authority to act on behalf of the client.

A caution not to repeat its failure to report suspicious and unusual transactions to the Financial Intelligence Centre.

X