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The use of automated transaction monitoring systems – FIC provides guidance

All accountable institutions, reporting institutions and relevant persons (collectively referred to as a “reporter”) has an obligation to monitor, detect and report suspicious or unusual activities and transactions in terms of section 29 of the Financial Intelligence Centre Act.

This obligation extends to all products and services that are rendered by the reporter and requires that all products and services that are rendered must be monitored for the detection and possible reporting of suspicious or unusual activities, transactions and/or series of transactions.

The Financial Intelligence Centre has now published Public Compliance Communication No. 45 that aims to provide further guidance regarding the requirements as set out in Directive 05 of 2019 relating to the use of an automated transaction monitoring system (ATMS).

In terms of regulation 24 of the Money Laundering and Terrorist Financing Control Regulations, a report under section 29 of the FIC Act must be sent to the FIC as soon as possible after a person became aware of the facts which gave rise to the suspicion. In terms of regulation 24(3) of the MLTFC Regulations, this period must not be longer than 15 (fifteen) days, excluding Saturdays, Sundays and public holidays.

Where a reporter has elected to make use of an ATMS to monitor and identify, PCC 45 indicates that where an alert is generated by the system, the reporter will be required to start investigating the matter within 48 hours (two days) of the alert being generated.

The 15 days within which to investigate and submit the report will not include Saturdays, Sundays and public holidays.

PCC 45 also confirms that the person or group of persons who exercises the highest level of authority within the organisation will remain responsible to ensure the effectiveness of the ATMS, and where there may be gaps, manual monitoring will be required. Where a reporter is an accountable institution the Risk Management and Compliance Program (“RMCP”) of the institution must make provision for the ATMS, its rules, ATMS methodology and the procedures to be followed.

Click here to download Public Compliance Communication No. 45.

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