The Financial Intelligence Centre (FIC) Act has been amended with the first set of provisions coming into effect on 13 June 2017. These provisions do not have any effect on accountable institutions.
The next set of provisions will come into operation on 2 October 2017 and relate to:
- Adoption of a risk-based approach to ensure that institutions understand money laundering and terrorist financing risks they face in their businesses and put appropriate measures in place to prevent or mitigate such risks.
- Establishment of appropriate policies, procedures, systems and controls that are effective for mitigation of money laundering and terrorist financing risk.
- Developing, documenting, maintaining and implementing a Risk Management and Compliance Programme.
- Applying appropriate customer due diligence measures to manage money laundering and terrorist financing risks.
- Establishing and verifying identity of beneficial owners of legal persons, trusts and partnerships.
- Managing relationships with Prominent Persons (i.e. Domestic Prominent Influential Persons and Foreign Prominent Public Officials).
- Keeping records of single transactions and business relationships.
- Assigning senior person/s in the business to take responsibility for governance of AML/CTF compliance.
- Providing ongoing training to employees on the provisions of the FIC Act and Risk Management and Compliance Programme.
The FIC recently published four documents on the implementation of the FIC Amendment Act for public comment and action. It appears that stakeholders are largely unaware of these publications. To address this, the FIC plans the following:
- Consultation with stakeholders to discuss the fact that the ability and capacity to comply with the provisions of the FIC Amendment Act may not be the same for both large and smaller accountable institutions.
- Readiness assessment: a survey is to be circulated during September to assess the state of readiness of the industry.
- Transitional period: Depending on the outcome of the survey, the Registrar’s office may consider a transitional period for all accountable institutions to allow businesses additional time to implement the new requirements.
- Compliance Gap: Accountable institutions should start now and continue to develop policies, procedures, systems and controls to implement the requirements of the FIC Amendment Act. Accountable institutions will be expected to demonstrate progress towards full compliance at agreed milestones and timelines.
- Inspections: The Registrar’s office will continue to conduct FIC inspections during the transition period to monitor compliance, provide guidance an advise accountable institutions on implementation of the new requirements.
- Sanctions: Sanctioning non-compliance with the new requirements of the FIC Amendment Act will be delayed in order to allow sufficient time to accountable institutions to make the necessary adjustments to implement the new requirements. However, administrative sanctions will be imposed on non-compliance with the current provisions of the FIC Act that are not amended, such as registration and reporting obligations.