MINISTER AMENDS THE SCHEDULES TO THE FINANCIAL INTELLIGENCE CENTRE ACT
The Minister of Finance has amended the Schedules to the Financial Intelligence Centre Act, 2001 (“FIC Act”), effective 19 December 2022.
The amendments contained in this Notice published in the Government Gazette on 29 November 2022, relate to changes affecting accountable institutions listed in Schedule 1, supervisory bodies listed in Schedule 2, and reporting institutions listed in Schedule 3 of the FIC Act.
With the amendment to the Schedules, newly designated items consisting of co-operative banks, company service providers, a wider category of credit providers, high-value goods dealers (businesses dealing in high-value goods receiving payments in any form of R100 000.00 or more per item, whether payment is a made in a single transaction or more transactions), the South African Mint Company, crypto asset service providers (“CASPs”), informal money or value transfer providers (hawaladars), and payment clearing service operators are now included in Schedule 1 of the FIC Act.
The new sectors will be required to register with the FIC as accountable institutions and fulfil certain regulatory obligations. These obligations include implementing customer identification and verification, customer due diligence, appointing a compliance officer, training employees on FIC Act compliance and ML/TF/PF risk exposure, undertaking business risk assessments for ML/TF/PF, and maintaining and implementing a risk management and compliance programme.
Accountable institutions are also required to file regulatory reports relating to suspicious and unusual transactions, cash transactions exceeding the prescribed threshold, and property that is linked to sanctioned persons, terrorist activity or terrorist organisations.
Similar to existing accountable institutions, all new Schedule 1 accountable institutions, will be required to fulfil FIC Act risk and compliance obligations, which entail implementing a risk-based approach to combating money laundering and terrorist financing.
In the first 18 months from the amendments’ commencement date, the FIC and supervisory bodies will focus on entrenching the FIC Act risk and compliance provisions and implementation among the new sectors in Schedule 1 to the FIC Act. Supervisory bodies will conduct inspections and, where warranted, issue remedial administrative sanctions, based on a risk-based approach, to correct identified areas of non-compliance.
In respect of the new sectors, the FIC and supervisory bodies do not envisage issuing financial penalties for non-compliance with the FIC Act during the transitional 18-month period.
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