FICA Training presentation

1. FICA

2. Financial Intelligence
Centre Act, 2001
FIC Amendment Act, 2017
To combat “Money Laundering” and the crimes
associated therewith.:
identification of proceeds of unlawful activities;
Combat money laundering;
Combat financing of terrorist and related
activities.

3. Money Laundering
“The performing of any act that may result in
concealing the nature of the proceeds of
crime or of enabling a person to avoid
prosecution or in the diminishing of the
proceeds of the crime.”

4. Who does FICA affect?
1. Accountable Institutions
2. All clients/ consumers
3. Single transaction or
4. Business relationship

5. Who qualifies as an
“Accountable Institution”?
1. Banks
2. Attorney
3. Estate Agent
→ Register with FIC

6. Responsibilities of Accountable
Institutions
- Identify & verify new and existing clients
- Record keeping of clients and transactions
- Reporting
- Risk Management Compliance Program
- Compliance Officer
- Staff Training
- Registration with FIC

7. Risk Based Approach
• Previously – Rule based approach
• Now – Risk based approach
• Meaning of Risk based approach
• To establish potential risk
• Discretion to determine appropriate compliance

8. Client Due Diligence
- Ongoing client due diligence
- Verify certain information:
- Nature of client’s business;
- Ownership & control structure;
- Beneficial ownership of client
- Monitoring, periodically obtaining fresh
client information and regular review

9. Client Due Diligence
- Legal entities, trusts & partnerships
- Unable to hide behind legal entity
- Prohibits business with Anonymous clients
- Apparent false or fictitious names

10. Risk Management &
Compliance Programme
- Obligation to develop & implement RMCP
- Consists of:
- Policy documents,
- Procedures;
- Systems and
- Controls
- Directors take ownership
- Reviewed regularly

11. Reporting
• Obliged to report suspicious & unusual
transactions
(within 15 days)
• Cash Threshold – R25,000
(within 2 days of becoming aware)
• Terrorist Property Report
• International fund transfer

12. Reporting
• Any employee / director / manager / owner
must report
• Money laundering
• Financing terrorist activities
• Tax evasion
• No apparent business purpose or
• No lawful purpose
• Anonymity guaranteed

13. Record Keeping
1. At least 5 years from the date of which
the business relationship is terminated; or
2. At least 5 years from the date on which
the transaction is concluded.

14. Record Keeping
• Manner in which records must be kept:
- no prescribed manner;
- specified in RMCP
• Principles:
– Free & easy access;
– Readily available
– Capable of being reproduced
– Off-site storage

15. Training &
Compliance
1. Training:
- comprehensive training
- copy of RMCP
2. Appoint “Compliance
Officer”
- sufficient competence
- seniority
- ensures compliance

16. Penalties
1. Fine up to R10 Million
2. Imprisonment up to 5 years
Mere suspicion = grounds for reporting!!

17. www.kvvinc.co.za
087 351 2022