The South African Reserve Bank's Prudential Authority (formerly known as the Office of the Registrar of Banks) has imposed administrative sanctions on HSBC Bank Plc Johannesburg Branch for failing to comply with aspects of the Financial Intelligence Centre Act 2001, as amended.

Section 45 FICA mandates the authority to supervise and enforce the compliance of accountable institutions that it regulates with the Act. It inspects pertinent accountable institutions to assess whether they have good enough controls in place for effective compliance; on one such visit it seems to have discovered that HSBC did not. It spotted certain weaknesses in HSBC’s AML processes, although it is not claiming that HSBC ever facilitated transactions involving money laundering or the financing of terrorism.

In respect of the failure to formulate and implement adequate processes and working methods as per section 42(1)(d) FICA, read with regulation 27 of the regulations relating to banks, which flesh out HSBC's obligation to detect and report suspicious and unusual transactions in accordance with section 29, the administrative sanctions imposed on HSBC are: (i) a directive to take remedial action in terms of section 45C(3)(c) in a certain time-frame; and (ii) a financial penalty of R15 million (€923,000), of which R7.5 million (€461,000) is suspended under section 45C(4)(c) for a period of three years, subject to good behaviour.
 
HSBC is co-operating with the Prudential Authority and has taken the necessary measures to deal with the compliance/control weaknesses that the regulator has denounced.