FIC Amendment Act comes into force this week
The FIC Amendment Act will be enforced on 2 April 2019 – are you ready?
As an accountable or reporting institution you will need to be particularly diligent – especially when dealing with legal entities, which can be used to hide the identity of suspected criminals as well as the source of funds and the true purpose of those funds.
The aim of Financial Intelligence Centre (FIC) legislation is to combat financial crimes, including money laundering, terrorist activities, bribery and attempts to evade paying tax.
Some of the trigger points you can look out for in terms of the Amendent include when someone is acting on behalf of another (e.g. a parent or guardian doing business on behalf of a minor child or a third party is paying for a product taken out by your client; ensuring you still have the correct documents and have verified your client’s ID when they change their banking details.
What’s happened so far?
The provisions of the FIC Act already implemented
dealt mainly with information sharing, consultation arrangements,
constitutional concerns relating to inspection powers, and improved functioning
of the FIC Act Appeal Board.
Other provisions dealt with changes to existing regulations and exemptions under the FIC Act, as well as staff training and major changes to systems by supervisors, the Office of the Chief Procurement Officer, and accountable or reporting institutions.
The Amendment Act also requires accountable
or reporting institutions to determine if there are money laundering or
terrorist financing risks associated with those they are doing business with,
as well as any relationship with a prominent person in companies doing business
over a certain value with government.
Accountable or reporting institutions also have to ensure those they are doing business with are not subject to Targeted Financial Sanctions by the United Nations.
Are you compliant?
Any business that is classified as an accountable or reporting institution (as defined in the Act) is required to implement or revise all internal rules and processes, and to provide training to staff to ensure compliance with the Act. Employees who have not received training should not be allowed to deal with clients.
Such businesses must appoint a compliance officer to ensure that they comply and keep up-to-date with legal requirements. Not being compliant can carry a possible jail term of up to 15 years or a fine of up to R100 million.
Contact Assent if you have any queries about your compliance.