Standard Bank SA and others sanctioned for money laundering shortcomings

THE South African Reserve Bank has imposed administrative sanctions on five prominent banks, including hefty fines to the tune of N$37,5 million, after routine inspections revealed inadequacies in their money-laundering control measures.

Standard Bank SA, GroBank Limited, Ubank Limited, Bank of China and HBZ Bank Limited were ordered to take remedial action for failure to comply with suspicious and unusual transaction reporting requirements, as well as cash threshold reporting requirements, amongst other identified transgressions.

“The SARB found weaknesses in each of the banks’ money laundering control measures following routine inspections conducted in terms of the Financial Intelligence Centre Act 38 of 2001 (FIC Act),” the bank said in a press statement issued last week.

While the fines were imposed in the context of the FIC Act, the SA Reserve Bank said they do not suspect that the banks in their individual capacities have been used to launder money.

“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,” said SA’s central bank.

SARB also said the fines were served to the banks as a caution against repeating the negligent conduct.

Standard Bank was fined N$30 million, GroBank N$5 million, Bank of China N$2 million, and Ubank N$500 000, whilst HBZ Bank Limited was served a caution only without a monetary fine applied.

The banks will not, however, pay the entire N$37,5 million as the central bank has agreed to more lenient terms if the banks agree to adhere “to certain conditions imposed by the SARB”.

Standard Bank’s fine will be cut by N$7,5 million, whilst both GroBank’s and Bank of China’s penalties will be suspended in their entireties, if they agree and adhere to the undisclosed conditions by the central bank. Ubank will pay the full N$500 000 penalty.

According to SARB, the financial penalties will be suspended in terms of section 45C(4)(c) of the Financial Intelligence Centre Act, for a period of three years.

The central bank said: “The five banks are cooperating with the SARB and have agreed to the necessary measures to address the identified compliance deficiencies and control weaknesses”.

The full release is available on SARB’s website.

Email: lazarus@namibian.com.na

Twitter: @Lasarus_A

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