Reserve Bank fines five forex dealers for Fica failures

The Reserve Bank has today imposed administrative sanctions on five foreign exchange dealers.

“The South African Reserve Bank (SARB) has imposed administrative sanctions on five authorised dealers in foreign exchange with limited authority (ADLAs),” the bank said in a statement.

The administrative sanctions were imposed after the central bank conducted inspections at the five ADLAs in terms of the Financial Intelligence Centre Act (Fica).

The inspections found weaknesses in the control measures the ADLAs have in place to control money laundering and combat the financing of terrorism.

The Fica 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.

“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 fines were imposed on Ayoba Foreign Exchange, Tourvest Financial Services trading as American Express Foreign Exchange Services, Imali Express, Forex World and Sikhona Forex.
A financial penalty of R80 000 , in terms of section 21 of the FIC Act was imposed on

Ayoba Foreign Exchange was fined R80 000 for failing to establish and verify clients’ details (better known as know–your–customer or KYC requirements) and R50 000 for failing to provide appropriate training to its employees to enable them to comply with the provisions of the Fica.

Tourvest received a R750 000 fine for failing to report cash transactions above R24 999,99 to the Financial Intelligence Centre.

Among the penalties for Imali Express (Pty) Limited was a R100 000 fine 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.
Forex Worldwas fined 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.

Sikhona Forex was given a R130 000 fine for failing KYC requirements, among others.

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