The Financial Intelligence Centre (FIC) is proposing that certain accountable institutions will have to submit an annual return on their money laundering (ML), terrorist financing (TF) and proliferation financing (PF) risks and their compliance with the FIC Act.
The FIC published Draft Directive 7 of 2022 and the associated questionnaire on 25 November for consultation.
The FIC said the information obtained from the risk and compliance return will assist the Centre in forming an understanding of the levels of compliance with Fica and in identifying the ML, TF and PF risks facing different industries.
The return will cover the reporting period from 1 April to 31 March of each year, and it will have to be submitted annually, no later than 30 June of each year. The failure to submit a return may result in an administrative sanction.
Who’s in and who’s out
The risk and compliance return will be compulsory for accountable institutions listed in Schedule 1 of Fica, excluding items 4, 5, 6, 7, 8, 10, 12, 13 and 19. This means the return will apply to the following accountable institutions:
- A practitioner who practises as defined in section 1 of the Attorneys Act.
- A board of executors or a trust company or any other person that invests, keeps in safe custody, controls or administers trust property within the meaning of the Trust Property Control Act.
- An estate agent as defined in the Estate Agency Affairs Act.
- A person who carries on the business of making available a gambling activity as contemplated in section 3 of the National Gambling Act in respect of which a licence is required to be issued by the National Gambling Board or a provincial licensing authority.
- A person who carries on the business of lending money against the security of securities.
- The Postbank referred to in section 51 of the Postal Services Act.
- The Ithala Development Finance Corporation Limited.
The return will not apply to these accountable institutions:
- An authorised user of an exchange as defined in the Securities Service Act.
- A manager registered in terms of the Collective Investment Schemes Control Act (Cisca) but excluding managers who only conduct business in Part VI of Cisca.
- A person who carries on the “business of a bank” as defined in the Banks Act.
- A mutual bank as defined in the Mutual Banks Act.
- A person who carries on a “long-term insurance business” as defined in the Long-term Insurance Act.
- A person who carries on the business of dealing in foreign exchange.
- A person who carries on the business of a financial services provider requiring authorisation in terms of the FAIS Act, to provide advice and intermediary services in respect of the investment of any financial product (but excluding a short-term insurance contract or a policy referred to in the Short-term Insurance Act and a health service benefit provided by a medical scheme as defined in section 1(1) of the Medical Schemes Act).
- A person who issues, sells or redeems travellers’ cheques, money orders or similar instruments.
- A person who carries on the business of a money remitter.
How to comment
Interested parties have until Tuesday, 20 December, to comment on the draft directive.
- Comments on Draft Directive 7 must be submitted using this online form.
- Comments on the risk and compliance return must be submitted using this online form.
Any questions relating to Draft Directive 7 may be sent to consult@fic.gov.za, or phone 012 641 6000 and select option 1, or submit an online query.
