The Prudential Authority (PA) has imposed administrative sanctions on Absa Bank for non-compliance with certain provisions of the Financial Intelligence Centre Act (FICA).
The PA, operating within the administration of the South African Reserve Bank, is mandated to supervise and enforce compliance by accountable institutions with FICA.
The sanctions, which include a financial penalty totalling R10 million, follow an inspection conducted in 2022.
The administrative sanctions stemmed from two areas of non-compliance: customer due diligence failures and delayed transaction monitoring.
Absa failed to conduct adequate customer due diligence on four foreign prominent public official (FPPO) client files and two politically exposed persons in respect of state-owned enterprises.
It also failed to conduct adequate enhanced due diligence on three of its domestic prominent influential person client files and five of its FFPO client files.
These due diligence failures resulted in a caution, a reprimand, and a R7m fine.
Absa did not comply with Directive 5 of 2019, because it failed to address 8 559 automated transaction monitoring system (ATMS) alerts within 48 hours, delayed four non-reportable ATMS alerts, and closed two non-reportable suspicious transaction/activity alerts beyond the 15-day reporting period. This led to a caution and a R3m fine.
The PA said Absa co-operated with the Authority and has undertaken the necessary remedial action to address the identified compliance deficiencies and control weaknesses.
Absa said in a statement it has settled the R10m penalty and remained fully committed to ensuring compliance with all applicable regulatory requirements.
“Absa has implemented all remedial actions to address the findings and has put in place enhanced working methods pertaining to specific aspects of customer due diligence and to timeously attend to regulatory reporting requirements,” the bank said. “These actions have been closed out, and the PA has been notified.”
