As we reported at the end of 2022, the amendments to Schedule 1 to the Financial Intelligence Centre Act (Fica), which significantly increase the entities included as accountable institutions, came into effect on 19 December.
Read: Will your business be an accountable institution from 19 December?
The institutions and businesses that have become accountable institutions include certain advocates, additional types of trust and company service providers, credit providers, additional types of money and value transfer service providers, high-value goods dealers, crypto asset service providers, co-operative banks and clearing system participants.
The Financial Intelligence Centre (FIC) has issued a reference guide to assist new, amended and existing accountable institutions.
The guide provides an overview of what the FIC is, what Fica requires from accountable institutions, and directs accountable institutions to the range of guidance material that is available from the FIC.
The Centre “strongly encouraged” accountable institutions to view all the material via the links provided in the document because it provides valuable information that can aid in effective compliance with Fica.
Click here to download the reference guide.
Registration guide
The FIC has also published a draft guide on the process that accountable institutions must follow when registering with the Centre in terms of section 43B of Fica. Draft Public Compliance Communication (PCC) 5D also details the institutions that have an obligation to register.
Click here to download draft PCC 5D.
Comments on draft PCC 5D must be submitted by Friday, 20 January, using the online submission link only.
Draft guides for specific accountable institutions
In addition, the FIC has published a number of draft guides aimed at assisting new and amended accountable institutions with meeting their compliance obligations. These draft guides have also been published for comment.
The draft PCCs provide guidance on the interpretation and application of the definitions of the following accountable institutions:
- Trust and company service providers;
- Credit providers;
- Legal practitioners;
- Money and value transfer service providers;
- High-value goods dealers; and
- Crypto asset service providers.
The draft PCCs highlight the vulnerabilities faced by the abovementioned accountable institutions and provide guidance on the indicators they can consider when determining their money laundering, terrorist financing and proliferation financing risks.
They also provide guidance on the additional controls that certain accountable institutions can consider to ensure compliance with their obligations in terms of Fica.
Comments on the draft PCCs must be submitted using the applicable online form. The deadline to comment is Friday, 20 January.
Draft PCC 6A: Guidance for trust and company service providers
In terms of item 2 of Schedule 1, a trust and company service provider (TCSP) is any person who, in the ordinary course of business, assists their client in the creation, operation and management of an external company, a foreign company, a close corporation or a trust. This includes attending to the registration of the business entity with the relevant authority.
Organisations that provide the services of a TCSP will be considered as an accountable institution, regardless of whether their employees are auditors, accountants or other professionals.
Click here to download draft PCC 6A.
Click here to comment on draft PCC 6A.
PCC 23A: Guidance for credit providers
A “credit provider” is listed in item 11 of Schedule 1 as:
- A person who carries on the business of a credit provider as defined in the National Credit Act (NCA).
- A person who carries on the business of providing credit in terms of any credit agreement that is excluded from the application of the NCA by virtue of section 4(1)(a) or (b) of that Act.
Click here to download draft PCC 23A.
Use this link to comment on draft PCC 23A.
Draft PCC 47A: Guidance for legal practitioners
Item 1 of Schedule 1 states that a legal practitioner includes:
- A person who is admitted and enrolled to practise as a legal practitioner as contemplated in section 24(1) of the Legal Practice Act and who is (i) an attorney (including a conveyancer or notary) practising for his or her own account as contemplated in section 34(5)(a) of that Act; or (ii) an advocate as contemplated in section 34(2)(a)(ii) of that Act.
- A commercial juristic entity as contemplated in section 34(7) of the Legal Practice Act.
Click here to download draft PCC 47A.
Use this link to comment on draft PCC 47A.
Draft PCC 118: Guidance for money and value transfer service providers
The FIC said it regards a money and value transfer service (MVTS) provider (item 19 of Schedule 1) as including providing financial services that involve the acceptance of cash, cheques, electronic funds, other monetary instruments or other stores of value, and the payment of a corresponding sum in cash, cheque, electronic funds or other form of value to a beneficiary by means of a communication, message, physical or electronic transfer or through a clearing network to which the MVTS provider belongs.
The Centre said an MVTS can be formal or informal. The following entities are considered to be formal MVTS providers: authorised dealers (such as banks), authorised dealers with limited authority (other than banks) and a category of financial services providers that have a direct reporting dispensation under the Exchange Control Regulations.
Click here to download draft PCC 118.
Use this link to comment on draft PCC 118.
Draft PCC 119: Guidance for high-value goods dealers
Item 20 of Schedule 1 defines a high-value goods dealer as a person who carries on the business of dealing in high-value goods in respect of any transaction where such a business receives payment in any form to the value of R100 000 or more, whether the payment is made in a single operation or in more than one operation that appears to be linked, where “high-value goods” means any item that is valued in that business at R100 000 or more.
High-value goods dealers also include certain motor vehicle dealers, dealers in precious metals, and dealers in precious stones.
Click here to download draft PCC 119.
Use this link to comment on draft PCC 119.
Draft PCC 120: Guidance for crypto asset service providers
Item 22 of Schedule 1 defines a crypto asset service provider (CASP) as a person who carries on the business of one or more of the following activities or operations for or on behalf of a client:
- Exchanging a crypto asset for a fiat currency or vice versa;
- Exchanging one form of crypto asset for another;
- Conducting a transaction that moves a crypto asset from one crypto asset address or account to another;
- Safekeeping or administration of a crypto asset or an instrument enabling control over a crypto asset; and
- Participation in and provision of financial services related to an issuer’s offer or sale of a crypto asset.
A “crypto asset” means a digital representation of perceived value that can be traded or transferred electronically within a community of users of the internet who consider it as a medium of exchange, unit of account or store of value and use it for payment or investment purposes, but it does not include a digital representation of a fiat currency or a security as defined in the Financial Markets Act.
Click here to download draft PCC 120.
Use this link to comment on draft PCC 120.
Queries
If you have queries about the PCCs, contact the FIC’s compliance contact centre on 012 641 6000 and select option 1, or submit an online query.
