The Reserve Bank has imposed administrative financial sanctions on life assurer Old Mutual over its noncompliance with the provisions of the Financial Intelligence Centre Act.
The Bank’s Prudential Authority (PA) imposed a financial penalty of R15.9m, of which R5.9m has been conditionally suspended for a period of 36 months. Old Mutual has been cautioned not to repeat the failures.
The PA said Old Mutual had co-operated with it throughout the process and had undertaken the necessary remedial action to address all the identified compliance deficiencies and control weaknesses.
The Financial Intelligence Centre is responsible for ensuring that the accountable institutions that are required to report to it are not being used for money-laundering and terrorism financing. SA’s lack of adequate controls over these activities led to its being greylisted by the Financial Action Task Force, the body that sets global standards for this.
Old Mutual was found to have failed to comply with its customer due diligence obligations. This included failures to verify the physical address of clients and identify their beneficial owners. On this count a financial penalty of R6m was imposed, of which R2m was conditionally suspended for 36 months.
Old Mutual was also found to have failed to timeously report cash transactions above the prescribed limit to the Financial Intelligence Centre. On this count a penalty of R4.9m was imposed, of which R1.9m was conditionally suspended.
The life assurer was also found to have failed to timeously report suspicious and unusual transactions to the Financial Intelligence Centre. The PA imposed a caution not to repeat the conduct that led to the noncompliance.
The PA said Old Mutual had failed to adequately develop and implement its risk management and compliance programme including to: identify, assess and monitor its money-laundering, terrorist financing and proliferation financing risks; adequately risk-rate clients before onboarding; provide evidence that the money-laundering and terrorism financing risk-rating methodology was applied consistently; implement its secondary money-laundering and terrorism financing risk indicators; provide evidence that it had documented its consideration of local geographical location risks; and adequately implement anti-money-laundering and countering the financing of terrorism obligations and controls.
On this count the PA imposed a penalty of R5m, of which R2m was conditionally suspended.
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