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SARB imposes administrative sanctions on Bidvest Bank and HSBC

SARB imposes administrative sanctions on Bidvest Bank and HSBC
04-10-24 / Kwanele Sibanda

SARB imposes administrative sanctions on Bidvest Bank and HSBC

Pretoria - The South African Reserve Bank (SARB) has on Friday announced that it had imposed administrative sanctions on Bidvest Bank Limited (Bidvest Bank) as a result of its non-compliance with the provisions of the Financial Intelligence Centre Act 38 of 2001 (FIC Act), following a FIC Act inspection conducted in 2022.

The Prudential Authority (PA), operating within the administration of the SARB, said it is mandated to supervise and enforce compliance by accountable institutions with the provisions of the FIC Act or any order, determination or directive made in terms thereof.

The administrative sanctions imposed on Bidvest Bank are due to its failure to comply with a provision of the FIC Act and consist of a caution not to repeat the conduct which led to the non-compliance and a financial penalty of R5 million, of which R2.5 million is conditionally suspended for a period of 12 months as from 23 August 2024, the regulator said.

The administrative sanctions imposed on Bidvest Bank stem from the following non-compliance:

a. Bidvest Bank failed to comply with section 42 of the FIC Act in that it failed to implement its Risk Management and Compliance Programme (RMCP) in relation to the assessed trade-based transactions in respect of a sample of clients assessed.

The PA imposed a caution not to repeat the conduct which led to the non-compliance and a financial penalty of R5 million, of which R2.5 million is conditionally suspended for a period of 12 months.

The Regulator said HSBC was also charged for non-compliance with the provisions of the Financial Intelligence Centre Act 38 of 2001 (FIC Act), following a FIC Act inspection conducted in 2021.

The administrative sanctions imposed on HSBC are said to be due to its failure to comply with certain provisions of the FIC Act and consist of three cautions and a financial penalty totalling R9.5 million, of which R4 million is conditionally suspended for a period of 36 months as from 10 June 2024.

The administrative sanctions imposed on HSBC stem from the following non-compliance:

a. HSBC failed to comply with its customer due diligence (CDD) obligations in terms of sections 21(1) and/or 21A to 21H of the FIC Act in that it failed to adequately conduct CDD on sampled active customer relationships.

The non-compliance inter alia included deficiencies in the identification and verification of the beneficial owners of clients.

The PA imposed a caution not to repeat the conduct which led to the non-compliance and a financial penalty of R5 million, of which R2.5 million is conditionally suspended for a period of 36 months.

b. HSBC failed to comply with FIC Act Directive 5 of 2019 in that it failed to attend to automated transaction monitoring system (ATMS) alerts within the required 48-hour period.

The PA imposed a caution not to repeat the conduct which led to the non-compliance and a financial penalty of R1.5 million.

c. HSBC failed to comply with section 42 of the FIC Act in that it failed to adequately develop, document and/or implement its Risk Management and Compliance Programme (RMCP) that would effectively enable it to identify and verify beneficial owners of clients.

The PA imposed a caution not to repeat the conduct which led to the non-compliance and a financial penalty of R3 million, of which R1.5 million is conditionally suspended for a period of 36 months.

The PA confirmed that HSBC cooperated with the PA and has undertaken the necessary remedial action to address the identified compliance deficiencies and control weaknesses.

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