The Financial Sector Conduct Authority (FSCA) published a press release advising of the administrative sanction imposed on two Financial Service Providers (FSPs), Theuns Vosloo Financial Advisory Services CC and Ashburton Fund Managers. The administrative sanction for Theuns Vosloo Financial Advisory Services CC amounted to R400 000 and R16 million for Ashburton Fund Managers respectively, for non-compliance with certain provisions of the Financial Intelligence Centre Act, No. 38 of 2001 (FIC Act).
The FSCA’s findings concluded that both Financial Institutions were in contravention of:
- Section 42(1) and (2) of the FIC Act in which accountable institutions must develop, document, maintain and implement an RMCP which should set out the manner and the processes by which accountable institutions will mitigate their money laundering and terrorist financing risks as well as comply with the provisions of the FIC Act. Both financial institutions developed an RMCP which included a programme for anti-money laundering and counter-terrorist financing however failed to set out details regarding the manner and the processes in place that ensure it will comply with the FIC Act.
- Both financial institutions were found to be non-compliant in terms of client identification and verification and did not identify and verify clients in accordance with the RMCP, which contravened section 21 of the FIC Act. It is important to note that all accountable institutions must identify and verify clients and keep sufficient records as evidence of this process, for example by requesting documents such as identification documents, bank statements, valid passports etc.
- Both financial institutions failed to comply with section 28A read with sections 26A – 26C which requires accountable institutions to scrutinise information and screening of clients against persons listed in the targeted financial sanctions issued by the United Nations Security Council. Further, if a targeted financial sanction finding is made, to report that fact to the Financial Intelligence Centre (“FIC”) to freeze the assets of those clients.
Both entities received a suspension of a portion of their administrative sanction (R200 000 has been suspended for a period of three years for Theuns Vosloo and R6 million for a period of three years for Ashburton Fund Managers) on condition that the entities comply with the directive to remediate the deficiencies that were identified and remain fully compliant with the provisions of the FIC Act.
In publication of these sanctions, the FSCA reminded all accountable institutions that their RMCP are the cornerstone of compliance with the FIC Act and failing to comply with the provisions of the FIC Act will not be condoned.
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