Secondary

compliance

Attorneys, FSPs and estate agents ‘most likely to be on the FIC’s radar’

Attorneys and estate agents are among the least likely to implement preventative measures to reduce money laundering and terrorist financing risks, according to the Financial Action Task Force’s Mutual Evaluation Report of South Africa in October 2021.

The report also noted that while the larger banks file the best-quality reports in terms of transaction reports, attorneys and estate agents generally file the worst.

The Financial Intelligence Centre Act (Fica) requires accountable institutions to implement risk management and compliance programmes (RMCPs) to mitigate their risks.

Failure to comply with the duties in respect of an RMCP is an offence and upon conviction, a person is liable to imprisonment for up to 15 years or to a fine not exceeding R100 million.

In terms of Fica, an RMCP must enable the accountable institution to:

  • Identify, assess, monitor, mitigate and manage the risk that the provision of its products or services may involve, or facilitate money laundering or the financing of terrorist and related activities.
  • Provide for the manner in which it determines whether a person is a prospective client when establishing a business relationship or entering into a single transaction with the institution.
  • Provide for the manner and processes by which it establishes and verifies the identity of the person.
  • Provide for the manner in which it determines whether future transactions that will be performed in the course of the business relationship are consistent with the institution’s knowledge of a prospective client.

For these reasons, it goes without saying that the RMCPs of accountable institutions, including FSPs, collective investment scheme managers, attorneys and estate agents, are on the radar of the Financial Intelligence Centre (FIC).

In terms of Fica, an accountable institution must, on request, make a copy of its RMCP available to the FIC.

Angela Itzikowitz and Era Gunning are executives in the banking and finance department at ENSafrica.

If you are unsure what your Fica obligations are, your first step should be to complete a rudimentary training course. Click here for information on what Moonstone offers in this regard.

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