In terms of the Financial Intelligence Centre Act , Act No. 38 of 2001 (FICA), the South African Reserve Bank (SARB) is mandated to supervise and enforce banks’ compliance with FICA to ensure that the necessary anti-money laundering and combating the financing of terrorism (AML/CFT) controls are in place. Furthermore, the SARB has the powers to impose an administrative sanction on any bank to which FICA applies, when satisfied on available facts and information that the bank in question has failed to comply with the provisions of FICA or any order, determination or directive made in terms thereof.
In this regard, the SARB conducted an AML/CFT inspection at Deutsche Bank AG Johannesburg Branch (Deutsche Bank) during February 2014, as part of its routine supervisory processes to assess whether Deutsche Bank had appropriate AML/CFT control measures in place to ensure compliance with the relevant provisions of FICA.
In addition, the SARB was notified by Capitec Bank (Capitec) of instances of non-compliance relating to the cash threshold reporting requirements as outlined in FICA.
Based on the available facts and information at the SARB’s disposal, it has imposed administrative sanctions on Deutsche Bank and Capitec, including financial penalties and the requirement that certain remedial action be taken.
The administrative sanctions are not an indication that Deutsche Bank or Capitec have in any way facilitated transactions involving money laundering and the financing of terrorism.
The administrative sanctions imposed on the respective banks are as follows:
Deutsche Bank: A financial penalty of R10 million and a directive to take remedial action to address deficiencies in the following areas:
- Identifying and verifying customers’ details (better known as ‘know-your-customer’ or KYC requirements).
- Controls and systems relating to the detection of property associated with terrorists and related activities.
Capitec: A financial penalty of R5 million and a directive to take remedial action to address deficiencies in the following area:
- Failure to report cash transactions above R24 999.99 to the Financial Intelligence Centre.
Each bank must pay the financial penalty imposed into the Criminal Assets Recovery Account as required by FICA. Both banks have co-operated fully with the SARB in remediating the identified shortcomings within agreed timeframes