CREATING A GOVERNMENT AGENCY TO REVIEW ALL ACCOUNT CLOSURES BY SOUTH AFRICA'S BANKS COULD INTERFERE WITH COMPLIANCE OFFICERS' AML/CFT EFFECTIVENESS; CAN IT BE DONE?

The ongoing discussion over whether the closing of customer accounts by financial institutions in South Africa, including the concept of legislation in Parliament creating a government agency to pass on such decisions, would take away an important compliance function: the ability to immediately shut down accounts when Transaction Monitoring determines suspicious or illegal activity. While we understand that there may be political reasons why politicians are speaking out about in support of such an action, prudence demands that a hard look at the potential adverse effect having such an entity will have on the suppression of money laundering and the financing of terrorism.

Such an entity might unnecessarily delay the closure of accounts, meaning that criminal activity could continue unabated, while a tedious review is conducted. It would have to (1) be staffed with individuals experienced in the compliance function, and (2) Be swift in making its decisions on whether account closures were appropriate, and South African government agencies are not known for their speed. Someone will, of course, now being up some sort of administrative appeal process, which could also delay action that is judged by ban to be of immediate resolution.

We call upon the Banking Association of South Africa (BASA) to assist Parliament in reaching a fair and equitable, and above all, effective, solution. Please don't tie the hands of compliance officers in the exercise of their duties. if there must be a government agency passing on their decisions, make sure it works quickly and correctly.

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For more information on South Africa Financial Crime:

https://titc.io/kenneth-rijock-webinar-africa-special