FICA Update

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FAIS Newsletter 25 from the FSB is dedicated to the Financial Intelligence Centre Act and, more specifically, to substantial changes which came into effect in June and October.

The amendments are designed to bring South Africa’s Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) legislative framework in line with Standards set out by the Financial Action Task Force (FATF) and international best practices. The amendments are also intended to augment South Africa’s position in combating money laundering and terrorist financing, and strengthen its capacity to prevent financial crimes and to discipline such crimes.

Commencement of the FIC Act

  • The first provisions of the FIC Act commenced on 13 June 2017. These provisions did not require changes to ML/TF Control Regulations, Exemptions or internal processes and systems of accountable institutions to enable compliance with the FIC Act. The provisions dealt mainly with dissolving the CMLAC, information sharing, consultation arrangements with stakeholders, concerns relating to inspection powers and warrants, and improvement of the appeal process.
  • The bulk of the provisions came into effect on 2 October 2017. These provisions required changes to ML/TF Control Regulations and withdrawal of Exemptions, as well as training of staff and major changes to processes and systems used by accountable institutions.
  • The commencement date of the remaining provisions relating to the freezing of assets in terms of the United Nations Security Council Resolutions on targeted financial sanctions will still be determined.

Status of Exemptions and ML/TF Control Regulations

The FIC Act is now a principles-based piece of legislation. It sets out broad obligations for accountable institutions, but leaves the methods of meeting those obligations to be decided by the accountable institutions. This implies that accountable institutions should determine the most appropriate means to implement the provisions of the FIC Act.

Previously, accountable institutions relied on Exemptions and other information that was prescribed in the ML/TF Control Regulations. The Exemptions were withdrawn and the ML/TF Control Regulations amended to make way for a risk-based approach.

A risk-based approach provides accountable institutions with the flexibility to use a range of mechanisms towards implementation of the FIC Act and encourages accountable institutions to explore innovative ways of offering financial services to their broader client-base. It must be noted that accountable institutions may continue to be guided by the contents of some of the withdrawn Exemptions in the implementation of their compliance approaches.

Training Obligations (section 43) – The accountable institution is required to provide its employees with ongoing training to enable them to comply with the FIC Act and the RMCP and to discharge the specific responsibilities assigned to them. Please note that accountable institutions with no employees are also subject to ongoing training.

MBSE Online FICA Training Updated

Moonstone Business School of Excellence worked very hard to align their online training modules with these amendments and confirmed on Friday that the updated training is now available. Moonstone Compliance clients get gratis access to the training.

In order to apply for the FICA Online training, click on the relevant link below:

Click here to download FAIS Newsletter 25 from the FSB to read all about the new FICA.