The recent amendments to Schedule 1 of the Financial Intelligence Centre Act (Fica) have made a substantial number of businesses “accountable institutions”. These businesses must now comply with the provisions of Fica and undertake the duties the legislation imposes on accountable institutions.
The Financial Intelligence Centre (FIC) is concerned that many new accountable institutions failed to register by the deadline of 20 March. Businesses that do not register have been warned that they face hefty fines.
Businesses must register using the FIC’s online registration system called goAML.
The extended list of accountable institutions includes, among others:
Company service providers, which include a person who carries on the business of preparing for, or carrying out, transactions for a client, where the client is assisted in the planning or execution of:
- The organisation of contributions necessary for the creation, operation or management of a company, an external company, or a foreign company;
- The creation, operation or management of a company, an external company, or a foreign company; or
- The operation or management of a close corporation.
Trust service providers, which includes a person who carries on the business of creating a trust arrangement for a client.
Credit providers.
High-value goods dealers, which is defined 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.
Money remitters, which is a person who carries on the business of a money or value transfer provider.
Crypto asset service providers.
Basic compliance obligations
Accountable institutions have certain compliance obligations, which include:
- Appointing a compliance officer, who must be an employee or a director of the accountable institution.
- Preparing a risk management and compliance programme (RMCP) that complies with the provisions of section 42 of Fica. The RMCP must be signed off by senior management and/or the board of directors.
- Undertaking a risk-based assessment in relation to the identification and verification of clients with whom the accountable institution concludes a transaction or enters a business relationship. Accordingly, it will be necessary for accountable institutions to risk-rate clients and to undertake customer due diligence on clients based on their relevant risk assessment.
- Undertaking ongoing customer due diligence in relation to those clients with whom the accountable institution concluded a business relationship.
- Retaining records in relation to the transactions concluded with clients, in line with the provisions set out in Fica.
- Submitting reports to the FIC in relation to, among other things, any transactions above the prescribed cash threshold, any suspicious and unusual transactions, or any electronic funds transfers above the prescribed threshold.
- Providing employees with ongoing training in relation to the provisions of Fica and the obligations to be undertaken by accountable institutions.
An accountable institution that fails to comply with its obligations under Fica could face administrative sanctions by the FIC. These may include a fine of up to R10 million in respect of natural persons and R50m in respect of legal persons.
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.
Would be interesting to know who (if anyone) should register as an accountable institution in those cases where husband and wife are trustees together with “an old friend” of the husband (not a professional trust provider, but does see himself as the “independent trustee”)