The Financial Intelligence Centre (FIC) has urged entities that have become accountable institutions to register with the Centre even if they missed the deadline of 20 March, to avoid non-compliance with their obligations under the Financial Intelligence Centre Act (Fica).
The Centre said it is vital that new accountable institutions understand their obligations in terms of Fica. This starts by being registered with the FIC.
There has been a low number of registrations by new accountable institutions since the amendments to Schedule 1 of Fica came into force on 19 December 2022, the FIC said in a statement on 17 March. New entities must register with the FIC as accountable institutions within 90 days after the amended Schedule 1 took effect.
If you’re unsure how to meet your Fica obligations, Moonstone Compliance has a range of compliance, consulting, and training services (see below).
Is this you?
The new entities now deemed to be accountable institutions include:
Company service providers, which include those who assist clients with transactions designed to establish, manage a company or a close corporation, as well as those who act for a client as a nominee as defined in the Companies Act.
Co-operative banks.
High-value goods dealers. This encompasses any transaction where 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 in a single operation or in more than one operation that appears to be linked.
Crypto asset service providers, specifically those who carry 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 transfers 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
- Participating in and providing financial services related to an issuer’s offer or sale of a crypto asset.
Clearing system participants that facilitate or enable the origination or receipt of any electronic funds transfer (EFT) and/or act as an intermediary in receiving or transmitting an EFT.
Casting a wider net
The definitions of certain sectors that were listed in Schedule 1 before 19 December were amended to cover a wider scope of activities, which may result in additional individuals or entities becoming accountable institutions. The sectors affected by these amendments include:
- Credit providers. These now include credit providers as defined in the National Credit Act (NCA), as well as anyone who carries on the business of providing credit in terms of any credit agreement that is excluded from the NCA by virtue of section 4(1)(a) or (b) of the Act.
- The amendment clarifies that this item covers a person who is required to be authorised in terms of the FAIS Act to provide either intermediary services or advice in respect of the investment of a financial product. However, this excludes a non-life insurance policy, reinsurance business as defined in the Insurance Act, and the business of a medical scheme as defined in the Medical Schemes Act.
- Money remitters. The wording has been changed to clarify that the definition also covers businesses involved in the transfer of “value” without funds being sent from one location to another.
- Trust service providers. The amendment clarifies that anyone who provides trust services (setting up a trust, managing trust property, acting as professional trustees), regardless of their profession, is an accountable institution.
Registration must be completed and submitted to the FIC using the online registration system called goAML.
Failing to register with the FIC or to update registration information constitutes non-compliance in terms of section 61A of Fica. This non-compliance may result in administrative sanctions, which may include a fine of up to R10 million in respect of a natural person and R50m in respect of a legal person.
Compliance obligations
In addition to registering with the FIC, accountable institutions must fulfil certain regulatory obligations, which include:
- Identifying and verifying new clients;
- Ongoing due diligence in respect of existing clients;
- Appointing a compliance officer;
- Training employees on Fica compliance and money laundering, terrorist financing and proliferation financing (ML/TF/PF) risk exposure;
- Undertaking business risk assessments for ML/TF/PF; and
- Formulating and implementing a risk management and compliance programme.
Accountable institutions must also file reports relating to suspicious and unusual transactions, cash transactions exceeding the prescribed threshold, and on property that is linked to sanctioned persons, terrorist activity or terrorist organisations.
Help is at hand
New and existing accountable institutions can find it daunting to understand all their Fica obligations, let alone know how they must go about complying with them.
Moonstone Compliance offers compliance, consulting, and training options for accountable institutions of all types and sizes to help them implement anti-money laundering procedures and meet the requirements of Fica.
Moonstone Compliance will explain the complex regulations and offer practical recommendations tailored to your business.
We provide a wide range of services, from providing documentation to implementing a full compliance framework. You can select a combination of services and have them customised according to your needs.
Click here to read more about Moonstone Compliance’s suite of Fica services or send us an online enquiry.
