The Reserve Bank on Friday announced that it has imposed administrative sanctions on five foreign exchange dealers.
In a statement the bank says, “The South African Reserve Bank (SARB) has imposed administrative sanctions on five authorised dealers in foreign exchange with limited authority (ADLAs)”.
The administrative sanctions were imposed after the central bank conducted inspections at the five ADLAs in terms of the Financial Intelligence Centre (FIC) Act.
The inspections found weaknesses in the control measures the ADLAs have in place to control anti- money laundering and combat the financing of terrorism.
The FIC Act mandates the Reserve Bank to ensure that ADLAs have adequate controls in place to combat acts of money laundering and the financing of terrorism. Flowing from these responsibilities, the Reserve Bank inspects ADLAs to assess whether they have appropriate measures in place as required by the FIC Act.
“It should be noted that the administrative sanctions were not imposed because the ADLAs were found to have facilitated transactions involving money laundering or the financing of terrorism but because of weaknesses in their control measures,” said the central bank.
The sanctions were namely imposed on Ayoba Foreign Exchange (Pty) Limited, Tourvest Financial Services (Pty) Limited trading as American Express Foreign Exchange Services, Imali Express (Pty) Limited, Forex World (Pty) Limited and Sikhona Forex (Pty) Limited.
A financial penalty of R80 000 for failing to establish and verify clients’ details (better known as know – your– customer or KYC requirements), in terms of section 21 of the FIC Act was imposed on Ayoba Foreign Exchange (Pty) Limited.
Among other penalties a financial penalty of R50 000 was also served on the company for failing to provide appropriate training to its employees to enable them to comply with the provisions of FIC Act and the internal rules applicable to them, in terms of section 43(a) of the FIC Act.
For Tourvest a financial penalty of R750 000,00 for failing to report cash transactions above R24 999,99 to the Financial Intelligence Centre, in terms of section 28 of the FIC Act among others.
Among the penalties for Imali Express (Pty) Limited was a financial penalty of R100 000 was imposed for failing to implement adequate processes and working methods in relation to the sanction screening of clients to ensure that it complies with its reporting duties, in terms of section 28A of the FIC Act.
Forex World (Pty) Limited received a financial penalty of R260 000 for failing to establish and verify clients’, as well as to establish and verify the authority granted to another person to act on behalf of the client, in terms of sections 21(1)(a) and 21(1)(c)(ii) of the FIC Act, respectively.
For Sikhona Forex (Pty) Limited a financial penalty of R130 000 was imposed for failing to identify and verify clients’ details (better known as know – your- customer or KYC requirements) in terms of section 21 of the FIC Act; and/or establish and verify the identity of that other person, where another person is acting on behalf of the client, in terms of section 21 of the FIC Act, among others.
