An accountable institution must register with the FIC to submit a risk and compliance return

Only accountable institutions that have registered with the Financial Intelligence Centre (FIC) and received an identity number may submit the risk and compliance returns (RCRs) required by Directives 6 and 7.

The FIC published two directives in March requiring certain accountable institutions to complete a questionnaire about their understanding of their money laundering, terrorist financing, and proliferation financing risks, as well as assess their compliance with the Financial Intelligence Centre Act (FICA).

The accountable institutions affected by the directives are called designated non-financial businesses and professions (DNFBPs) by the Financial Action Task Force.

The FIC uses a risk-rating tool to analyse the data from the RCRs to identify higher-risk DNFBPs as a basis for considering risk-based supervision and inclusion in the Centre’s supervisory plan.

Directive 6 applies to the following DNFBPs listed in Schedule 1 to FICA:

• legal practitioners (item 1);
• company and trust service providers (item 2);
• estate agents (item 3); and
• gaming institutions (item 9).

The RCR for these accountable institutions covers the period 1 April 2022 to 31 March 2023 (both dates inclusive).

The return was supposed to have been submitted to the FIC by 31 May.

Click here to access the return for Directive 6.

Directive 7 applies to the following accountable institutions listed in Schedule 1:

• credit providers (item 11);
• South African Post Bank (item 14);
• high-value goods dealers (item 20);
• South African Mint Company (item 21); and
• crypto asset service providers (item 22).

The RCR for these accountable institutions covers only six months, from 1 January to 1 June 2023 (both dates inclusive).

The deadline for submitting the return was 31 July.

Click here to access the return for Directive 7.

The failure to comply with Directive 6 or 7 and submit the RCRs can lead to administrative sanctions, which may include fines.

Requirements for submitting an RCR

On 5 October, the FIC issued a notice informing accountable institutions that must an RCR of the following:

• Only accountable institutions that have successfully registered with the FIC on its registration and reporting platform (goAML) and have received a FIC organisation identity number (Org ID) may submit an RCR.
• Accountable institutions must not submit an RCR if they have not registered with the FIC and received an Org ID.
• Accountable institutions that have not yet registered with the FIC must doing via this link.
• An accountable institution must submit a separate RCR for each Schedule 1 item registered with the FIC. This means a separate RCR must be submitted for each FIC Org ID held by an accountable institution. This requirement applies to entities with branch networks and to entities with multiple offerings across the Schedule items.
• Only one RCR submission is permitted per accountable institution for each Org ID held.
• Compliance officers must communicate the requirement for the submission of RCRs internally in their institutions to avoid duplicate submissions.
• Accountable institutions must accurately capture and state their Org ID number in the RCR. In the Org ID field, only the goAML-generated Org ID must be captured, not a personal identity number or the company registration number.

For queries on the RCR submission process, contact the FIC as follows:

• Use the Compliance Queries link on the FIC’s website.
• Call the FIC compliance contact centre on 012 641 6000 and select option 1.

We can help with registration and overall FICA compliance

In addition to registering with the FIC, FICA requires all accountable institutions to fulfil the following compliance obligations:

• Implement a risk-based approach to customer due diligence, including aspects such as ongoing due diligence, enhanced due diligence, screening for domestic and foreign politically exposed persons, and establishing the beneficial ownership in legal structures.
• Develop a risk management and compliance programme (RMCP).
• Keep records of customers’ information and transactions.
• Adhere to the governance obligations as outlined in FICA.
• Undertake business risk assessments for money laundering, terrorist financing, and proliferation financing.
• Train employees on how to comply with FICA and the institution’s RMCP.
• Submit regulatory reports to the FIC relating to suspicious and unusual transactions, cash transactions exceeding the prescribed threshold, property that is linked to sanctioned persons, terrorist activity or terrorist organisations, and electronic cross-border transfers of funds.

At Moonstone Compliance, we have 20 years of experience in providing solutions in respect of FICA, anti-money laundering, counter-terrorist financing, and counter-proliferation financing compliance. We offer solutions ranging from basic toolkits and packaged solutions to developing completely bespoke solutions, depending on the client’s needs.

Click here to read more about Moonstone Compliance’s suite of FICA services or send us an online enquiry.