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Abstract from

Conservative Corporate Compliance: Reflections on a Study of Compliance Responses by South African Banks

Louis de Koker holds a chair in Law at the School of Law, Deakin University. He also holds a visiting professorship in commercial law at the University of Johannesburg and an extraordinary professorship in mercantile law at the University of the Free State.

John Symington is a compliance expert who regularly researches and lectures on various aspects of compliance management. He was formerly a group compliance officer of a major international bank headquartered in South Africa. He is also a past president of the Compliance Institute of South Africa.

While corporate non-compliance receives much attention, conservative and over-compliant responses are often ignored. These responses go beyond what is required by a particular regulatory requirement. In many cases, regulators may support such responses because they advance regulatory objectives. In the context of risk-based regulation and compliance, especially the model implemented by the Financial Action Task Force to combat money laundering and financing of terrorists, that may, however, not necessarily be the case. With this risk-based approach, regulated institutions are required to respond to higher risks by adopting enhanced risk mitigation measures and are allowed to simplify those measures where the risks are assessed as low. Failure in the latter cases to simplify risk mitigation measures where appropriate, may be inefficient and, in some instances, may even undermine regulatory objectives. This article investigates the drivers of conservative responses by South African banks to statutory anti-money laundering and counter-terrorist financing laws.

(2014) Vol 30 Law in Context p228


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