The South African Reserve Bank (SARB) has imposed a fine of ZAR75m ($6.2m) on China Construction Bank’s Johannesburg Branch (CCB) citing non-compliance with the Financial Intelligence Centre Act 38 of 2001, as amended (FIC Act).
The central bank of the country imposed administrative sanctions after completing an inspection which found the CCB’s anti-money laundering measures fragile.
It also found weaknesses in combating the financing of terrorism control measures.
In its decision, SARB has suspended ZAR20m of the financial penalty in terms of section 45C(4)(c) of the FIC Act, for a three year period from 28 November last year, if CCB adheres to the conditions stated by the central bank.
The FIC Act authorises SARB to evaluate whether all banks have adequate controls prevent money laundering and the financing of terrorism.
SARB also noted that the imposition of the fine does not imply that CCB facilitated illicit transactions involving money laundering but because of fragile control measures.
Besides directing the CCB to pay a ZAR75m fine, SARB also asked the bank to verify customer details and take appropriate action in the areas where the bank failed.
It includes record keeping requirements in terms of section 22 of the FIC Act; to comply with cash threshold reporting requirements in terms of section 28 of the FIC Act; and comply with suspicious and unusual transaction reporting requirements in terms of section 29 of the FIC Act.
SARB also asked the bank to implement adequate processes and working methods to detect property associated with terrorism and associated activities.