BSP failed to comply with rules

BANK South Pacific Financial Group Ltd (BSP) has acknowledged that it failed to conduct effective enhanced customer due diligence reviews and that there were compliance gaps in its anti-money laundering (AML) and counter terrorist financing (CTF) programme.
According to BSP, a formal warning was issued to the bank by the Financial Analysis and Supervision Unit (Fasu) on July 12.
The warning was issued after an on-site review conducted on Oct 23, 2019, identified that BSP had failed to comply with the AML/CTF Act 2015 and its own AML/CTF Policy.
BSP was issued a show-cause notice to explain why Fasu should not impose enforcement actions.
BSP responded to the notice on April 6.
Fasu director Benny Popoitai said in a statement then that: “The nature of BSP’s non-compliance is serious enough for Fasu to have issued an infringement notice.
“However, Fasu has chosen to apply a formal warning instead making this the first occasion of regulatory action undertaken by Fasu against BSP.
“Consistent with the application of Section 100 of the Act, Fasu believes that there are reasonable grounds to determine that BSP has engaged in conduct that contravened requirements of the Act.”
Popitai warned that Fasu expected BSP to cooperate with the regulatory measures imposed.
“If BSP, or persons within BSP, continue to engage in conduct that constitutes offences against the AML/CTF Act, civil or criminal enforcement action may be taken,” he said.
However, in response to Fasu’s warning, BSP in a statement yesterday said it has amended its AML/CTF policy, conducted training on the Criminal Code Act and delivered an enhanced customer due diligence plan to Fasu by the date required.
An external auditor was also appointed under Sect 10 of the AML/CTF Act for an initial six-month period and its independent audit started on Nov 15.
“Since Fasu’s first on-site review of BSP in March 2018, BSP has committed to and implemented various improvements to its AML/CTF programme,” the bank said.
“Improvements undertaken by BSP include a revision of governance structures to give directors enhanced oversight over the compliance and AML functions, increased AML staffing resources, updated risk assessments and policies, implementation of and enhancements to transaction monitoring systems, improved customer documentation and identification procedures and increased AML/CTF training for its staff.
“BSP has been assisted in this process by Fasu, and has benefitted from Fasu’s oversight and guidance.”
The bank said it remained committed to working with Fasu to further improve and uplift its AML/CTF programme and initiatives, and to not only fully comply with the AML/CTF Act but to also ensure that it made continuous improvements consistent with international best practices and compliance standards.