Namibia’s finance watchdog hefts a N$1 Million AML fine on a Namibian company for non-compliance
N$1 million (R1.2 million). That’s how much the Namibia Financial Institutions Supervisory Authority (NAMFISA) has fined an undisclosed Namibian company for not complying with anti-money laundering (AML) regulations. And, apparently, that’s just a slap on the wrist compared to what’s coming for those who don’t comply.
This came to light in an examination of NAMFISA’s 2023 annual report according to Nam Business Express. And, although unnamed, we do know the accountable company operating in the capital markets sector.
Here’s what you need to know about the recent hefty AML fine in Namibia.
(Breaking: Read all about it: Namibia greylisted by FATF)
Penalty of N$1 Million
The undisclosed institution faced this significant financial penalty due to a range of contraventions, including:
- Non-Compliance with Risk Management Processes: The institution was found to have inadequate risk management processes in place.
- Customer Due Diligence (CDD): Failure to properly conduct customer due diligence, a critical step in identifying and verifying the identity of customers.
- Monitoring of Transactions: The institution did not effectively monitor transactions, potentially allowing suspicious activities to go unnoticed.
- Enhanced Due Diligence (EDD): EDD, which involves a higher level of scrutiny for high-risk customers, was not carried out as required.
- Screening Customers Against UNSC Lists: The institution failed to screen customers against the United Nations Security Council Sanctions (UNSC) Lists, which is essential to prevent transactions involving sanctioned entities.
- Reporting Suspicious Transactions: It did not report suspicious transactions to the Financial Intelligence Centre (FIC), a crucial step in combating financial crimes.
- Reporting Cash Transactions Above Threshold: Cash transactions exceeding the reporting threshold of N$99,999.99 were not reported, which is vital for AML
These contraventions underscore the critical importance of robust AML/CFT measures within financial institutions to prevent illicit financial activities and protect the integrity of the financial system.
Inspections Order of the Day
In their annual report for the year ending March 31, 2023, NAMFISA highlighted the significance of their supervisory role and the actions taken to enforce compliance. They mentioned that, when necessary, they will investigate and even conduct inspections.
"The objective of these inspections was to assess the adequacy of compliance policies as well as the effectiveness of remedial measures adopted by [accountable institutions] to address control weaknesses identified during the previous off-site inspections. The off-site inspections were aimed at identifying compliance gaps and providing guidance."
And this recent N$1 Million penalty is by far a very lenient one, as NAMFISA further added, "The Authority imposed lighter sanctions as the affected industry is rated as low risk in terms of the ML/TF/PF risks."
The Path to Compliance
In light of these developments and to encourage others in the financial sector to adhere to AML/CFT regulations, it is essential for institutions to prioritize compliance and ensure they have robust measures in place. Compliance not only safeguards the institution but also contributes to the overall integrity of the financial system. Discover more on AML compliance in Namibia.
Also get an inside look at balancing cost vs AML compliance in Africa, see how to get sanction screening in Africa and how to save on sanction screening.
See SA’s FIC urgent plea to lawyers and estate agents: get compliant to avoid AML penalties.
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