The Financial Intelligence Centre (FIC) is calling for comments from accountable institutions, reporting institutions, supervisory bodies, and other persons on the draft Public Compliance Communication 12A (draft PCC 12A).
The draft PCC 12A is an update to the existing Public Compliance Communication 12.
The draft PCC 12A provides guidance and clarity on what compliance activities can be outsourced by an accountable institution to third parties:
|●||Draft PCC 12A restates that Customer Due Diligence (CDD) cannot be outsourced in its entirety and that the accountable institution will be required to play an active role in this process. Furthermore, where there is outsourcing of functions relating to record-keeping, the FIC must be provided with appropriate details relating to the third-party provider.|
|●||The proposed updates to PCC 12 include the addition of the FIC’s view on the outsourcing of:|
|○||risk management and therefore risk rating of clients and the use of a template RMCP documents,|
|○||scrutinising of client information against both the TFS and UN Sanctions List by a outsource party,|
|○||registration with the FIC which may not be outsourced as no third parties may have access to the login details of the Accountable or Reporting Institution or any reporting officers of such an institution,|
|○||quality assurance on the third-party service provider and therefore, processes for approval of a such a provider or vendor, and|
|●||As was already stated in PCC 12, reporting obligations cannot be outsourced to a third party.|
|●||Most importantly draft PCC 12A, reiterates Section 42A of the FIC Act requiring that an Accountable Institution must have a compliance function to assist the board of directors or the senior management in discharging their compliance obligations under the Act. This person must have sufficient competence and seniority to ensure the effectiveness of the compliance function. Accountable institutions may seek assistance and advice from third-party service providers.|
Click here to download Draft Public Compliance Communication No. 12a (PCC 12a)
Click here to download the Consultation Note relating to PCC 12A.