Financial services offenders to pay up a collective R36.9m in sanctions this year

The Prudential Authority (PA) of the South African Reserve Bank (SARB) is racking up more notches on its administrative sanctions belt.

The punitive actions are all part of South Africa’s strategy to be removed from the Financial Action Task Force (FATF) greylist by June 2025.

Read more: Treasury cautiously optimistic that SA will brave ‘tough challenge’ to get off FATF greylist

The latest financial services company to be smacked with a multimillion-rand fine is Old Mutual Life Assurance, for non-compliance with the Financial Intelligence Centre (FIC) Act, following an inspection in 2020.

Old Mutual will have to cough up R15.9-million, of which R5.9-million is conditionally suspended for three years as from 23 July 2024. The administrative sanctions consist of four cautions and the financial penalty. In a media statement, the SARB outlined Old Mutual’s transgressions as follows:

• Customer due diligence (CDD) obligations – This included failure to verify the physical address of clients and identify 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 R6-million, of which R2-million is conditionally suspended for three years;


• Cash threshold reporting (CTR) obligations – Failure to report timeously cash transactions above the prescribed limit to the FIC. The PA imposed a caution not to repeat the conduct which led to the non-compliance and a financial penalty of R4.9-million, of which R1.9-million is conditionally suspended for a period of 36 months;


• Suspicious and unusual transaction report (STR) – Failure to report timeously on suspicious and unusual transactions to the FIC. The PA imposed a caution not to repeat the conduct which led to the non-compliance; and


• Risk management and compliance programme (RMCP) – Old Mutual failed to develop a risk management and compliance programme. 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-million is conditionally suspended for a period of three years.

• identify, assess and monitor the company’s money laundering/ terrorist financing (ML/TF) and proliferation financing risks;


• adequately risk rate clients prior to onboarding;


• show evidence that the (ML/TF) risk rating methodology is applied consistently;


• implement secondary ML/TF risk indicators;


• show evidence that the company has documented its consideration of local geographical location risks; and


• adequately implement anti-money laundering and countering the financing of terrorism obligations and controls in relation to its CDD, CTR and STR obligations.

(Table: Compiled by Neesa Moodley)