The Prudential Authority of the South African Reserve Bank has fined HSBC Bank R 15m ($1m) for failures in AML and CTF.
These administrative sanctions have been placed on the Johannesburg branch for non-compliance with aspects of the Financial Intelligence Centre Act 38 of 2001. Under the regulation, enterprises must ensure they have adequate and suitable tools and measures in place to comply with the legislation.
However, the Prudential Authority has identified ‘weaknesses’ at HSBC in proactively detecting potential money laundering and financing of terrorism.
In a release from the Authority it said, “It should be noted that the administrative sanctions were not imposed because HSBC was found to have facilitated transactions involving money laundering or the financing of terrorism.”
Due to not meeting the standard for comfortably identifying and reporting suspicious or unusual transactions, HSBC has been handed two sanctions.
The first action to be taken is the implementation of a directive which will take remedial action in terms of the regulation.
Its second sanction is a $1m fine, of which, around $521,000 will be suspended for a three-year period, subject to the bank adhering to conditions.
According to the Authority, HSBC is co-operating and has already taken measures to address the gaps in its compliance and infrastructure weaknesses.
Copyright © 2018 RegTech Analyst
