Title: COBAC’s Crackdown on Non-Compliant Banks in Cameroon: Sanctions, Dismissals, and the Importance of Robust Compliance Functions
COBAC Imposes Heavy Sanctions on Non-Compliant Banks and Financial Institutions
- COBAC (Commission Bancaire de l’Afrique Centrale) imposes heavy fines and sanctions on 9 banks and 12 financial institutions
- Breaches ranged from holding unjustified external assets and failure to report, to non-compliance with foreign exchange regulations and repayment of undeclared loans
- Total sanctions amounted to over 2.1 billion FCFA
COBAC’s Stricter Enforcement Measures and Growing Regulatory Complexity
- Regulatory awareness increased
- Adherence to new foreign exchange regulations, which came into force in 2019, was required
Accountability for Non-Compliance: Senior Management Dismissed
- Some senior bank officials held accountable for non-compliance
- Chairman of the Board of Directors and General Manager of CCA Bank S.A. were among those dismissed
- Similarly, the Chairman of the Board of Directors and the promoter of the microfinance Express Union at Banque Atlantique Cameroun S.A. were dismissed
Addressing the Root Causes: Professional Inadequacy and Lack of Management Support
- Professional inadequacy within compliance functions
- Compliance officers often had to prioritize their primary functions over the needs of the compliance function
- Lack of senior management support and ineffective policies and procedures exacerbated issues
- Banks must prioritize and invest in compliance functions
- Create a standalone, independent compliance unit
- Effective framework for managing risks, adequate training, and good corporate governance and transparency
COBAC’s Actions: A Powerful Reminder
- Banks serve as gatekeepers in the fight against money laundering and terrorism financing
- Robust compliance functions, suitably staffed, financed, and prioritized by management, are essential
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