Over non-compliance of anti-money laundering rules.
Old Mutual Life Assurance Company got a R15.9 million fine from the South African Reserve Bank (Sarb) for failure to comply with certain provisions of the Financial Intelligence Centre (FIC) Act, but R5.9 million of the fine is conditionally suspended for 36 months.
In a statement issued on Friday, the Sarb said the administrative sanctions imposed came after an FIC Act inspection conducted in 2020.
“The Prudential Authority, operating within the administration of the Sarb, 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 central bank noted.
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Non-compliance
The Prudential Authority says the sanctions imposed on Old Mutual Life Assurance Company stem from non-compliance, including:
- failure to comply with its customer due diligence obligations, and failure to conduct due diligence on sampled active customer relations;
- failure to verify the physical address of clients and identify the beneficial owners of clients;
- non-compliance with cash threshold reporting obligations and failure to timeously report cash transactions above the prescribed limit in terms of the FIC Act; and
- failure to timeously report suspicious and unusual transactions to the FIC.
Old Mutual Life Assurance Company also failed to adequately develop and implement its Risk Management and Compliance Programme, including identifying and monitoring money laundering, terrorist financing and proliferation financing risks.
It also failed to adequately risk rate clients before onboarding.
Old Mutual Group issued its own statement in response, saying it will not appeal the sanction and has agreed to accept the penalty of which R10 million is payable upfront and R5.9 million is suspended for three years under the FIC Act.
The Prudential Authority confirmed that Old Mutual cooperated with the authority throughout the process and has taken the necessary remedial action to address the deficiencies.
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Old Mutual emphasises in its statement the fine is an “administrative sanction stemming from gaps identified in the anti-money laundering and countering the financing of terrorism [AML/CFT] programme”.
“[It is] not because Old Mutual was found to be a conduit for money laundering,” the group says.
The group adds that it is and will remain committed to implementing robust processes and controls in the ongoing fight against money laundering and other illegal activities by criminals and syndicates targeting the broader financial services sector.
This article was republished from Moneyweb. Read the original here.
