The South African Reserve Bank (SARB) has imposed administrative sanctions on Old Mutual Life Assurance Company (South Africa) Limited (OMLACSA) following its failure to comply with key provisions of the Financial Intelligence Centre Act 38 of 2001 (FIC Act). This action stems from a FIC Act inspection conducted in 2020, revealing deficiencies in compliance.
The Prudential Authority (PA), which operates within SARB and is tasked with supervising accountable institutions, found that OMLACSA failed to meet customer due diligence (CDD), cash threshold reporting (CTR), and suspicious transaction reporting (STR) obligations, as required by the FIC Act.
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Specific Non-Compliance Issues
Customer Due Diligence (CDD) Failures:
OMLACSA did not properly verify client addresses or identify the beneficial owners of its clients, in violation of sections 21 and/or 21A to 21H of the FIC Act. A caution was issued, alongside a financial penalty of R6 million, with R2 million conditionally suspended for 36 months.
Cash Threshold Reporting (CTR) Failures:
OMLACSA failed to report cash transactions above the prescribed limit in a timely manner, as required under Section 28 of the FIC Act. For this infraction, the PA imposed a penalty of R4.9 million, with R1.9 million conditionally suspended for 36 months.
Suspicious Transaction Reporting (STR) Failures:
The company did not timely report suspicious and unusual transactions, violating Section 29 of the FIC Act. A caution was issued, but no additional financial penalty was imposed for this specific violation.
Inadequate Risk Management and Compliance Programme (RMCP):
OMLACSA was found lacking in its development and implementation of its RMCP, particularly regarding the identification and monitoring of money laundering and terrorist financing risks. A R5 million fine was imposed, with R2 million conditionally suspended for 36 months.
Remedial Action Taken
OMLACSA has cooperated fully with the PA and has since taken the necessary corrective measures to address the compliance deficiencies. SARB confirmed that these sanctions aim to ensure stricter adherence to the FIC Act and enhance the overall integrity of the financial system.
