The FSCA will start conducting inspections in terms of the Financial Intelligence Centre Act (FIC Act) during May 2019. Any non-compliance will be viewed in a serious light and may lead to administrative action being taken by the FSCA against an accountable institution.
The FSCA’s supervisory approach to the amended FIC Act, post 2 April 2019, has been set out in a General Communication to accountable institutions. It is important that accountable institutions take note of this document.
Accountable institutions must have started a process to become compliant with section 26A-26C of the FIC Act relating to targeted financial sanctions (refer to www.fic.gov.za for the Targeted Financial Sanctions List). This process must be completed by 31 May 2019. In particular, accountable institutions must have started with a process to: identify if persons or entities listed in a resolution by the Security Council of the United Nations adopted under Chapter VII of the Charter of the United Nations (UN lists) are clients of the accountable institution; draft policies and guidelines on how to deal with property, financial services of clients listed on the UN lists; and draft policies and procedures to report transactions in terms of section 28A(1)(c) and 29(1)(b)(vi) of the FIC Act.
The FSCA expects that accountable institutions would have in place a Risk Management and Compliance Program (RMCP) which clearly demonstrates the processes and procedures of dealing with money laundering and terrorist financing (ML/TF) risks. The FSCA expects that accountable Institutions will have substantially complied with the provisions of section 42 of the FIC Act. The RMCP must have been approved by the board of Directors, senior management or other person or group of persons exercising the highest level of authority in the accountable institution.
Full implementation of the customer due diligence and record keeping requirements as set out in the amended FIC Act and approved RMCP in terms of new clients i.e. clients on boarded from 2 October 2017. In terms of clients on boarded prior to 2 October 2017, the FSCA expects accountable institutions should have started a process to align its risk classification to those clients.
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