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Joint Communication 2A of 2020 – Clarity for AIs on customer due diligence

A communication issued on 21 April 2020 sets out the Financial Sector Conduct Authority (FSCA), South African Reserve Bank, Prudential Authority (PA) and Financial Intelligence Centre (Authorities) position concerning the Covid-19 pandemic and its impact on the ability of Accountable Institutions (AIs) to adhere to their obligations regarding customer due diligence (CDD), particularly that of conducting on-going due diligence, in terms of section 21C of the FIC Act.

A Joint Communication (2A) has now been issued by the Authorities that provides a revised, as well as updated, time frame to certain dates stipulated in the prior communication.

In summary the updated Communication states:

That the FSCA and the PA do not expect that there should be any freezing or closure of accounts due to Accountable Institutions (“AIs”) not being able to perform ongoing customer due diligence (CDD) for the period 1 March 2020 until after Level 4 of the lockdown, where face-to-face verification was required.
AIs must already have started with a plan addressing how this outstanding ongoing due diligence will be completed post the Level 3 lockdown.
There is an expectation that AIs communicate detailed plans with requisite deadlines for completion, in writing to their respective supervisory bodies by no later than seven (7) days post the Level 3 lockdown period.
It is required that each AI that is affected must submit a plan that includes completion dates that do not extend further than eight (8) months from day one of the Level 3 lockdown period.
The remainder of the content of Communication 2 of 2020 remains applicable.

The submission date of 15 May 2020 is therefore no longer applicable, however AIs must keep in mind that there may be different end dates for Level 3 lockdown for each province in South Africa.

Click here to download Joint Communication 2A.

Related articles: Covid-19 – Supervisory response.

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