Reserve Bank fines HSBC R15m
The SA Reserve Bank's Prudential Authority has disciplined HSBC Bank Johannesburg for weaknesses in its processes that prevent the bank from ‘proactively detecting potential money laundering and the financing of terrorism’. The bank has been fined R15m and ordered to take remedial action, the Reserve Bank said.
A Fin24 report says in a statement, the Reserve Bank said it had imposed administrative sanctions on HSBC Bank Johannesburg branch for non-compliance with aspects of the Financial Intelligence Centre Act 38 of 2001. ‘The administrative sanctions were imposed because certain weaknesses were identified in HSBC’s processes which inhibited HSBC from proactively detecting potential money laundering and the financing of terrorism,’ the Reserve Bank said.
‘It should be noted that the administrative sanctions were not imposed because HSBC was found to have facilitated transactions involving money laundering or the financing of terrorism,’ the statement added. The failure to formulate and implement adequate processes and methods as per FICA – which would enable HSBC to detect and report suspicious or unusual transactions – gave rise to the sanctions, SARB said.
Of the R15m fine, half would be suspended for a period of three years, subject to HSBC adhering to certain conditions.
Peter Hain, the senior British legislator who sparked a criminal probe into HSBC’s ties to the Gupta family, is not surprised about the fine. ‘I think HSBC have been incredibly complacent about the way they’ve managed SA accounts, suspicious or normal. There’s no question that the Guptas, as HSBC admitted to me, had used their accounts.’ According to a Business Day report, Hain told British legislators a year ago that HSBC’s SA branch had alerted the bank’s London office about the Guptas’ transfers of money from SA to the UK and other markets.
However, the London unit had chosen to ignore those warnings, Hain said at the time. He told Business Day yesterday that the UK’s Financial Conduct Authority was still ‘ploughing through a lot of evidence’ as part of its probe into the transfers. He said that he had given investigators ‘detailed information’ about the transactions.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
