An intensive visit could await you… be prepared

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James George

Anti-money laundering is a hot topic with the Financial Services Conduct Authority (FSCA) and the Financial Intelligence Centre (FIC) currently on an inspection drive to visit as many FSPs as possible. Both category I and II FSPs will be assessed for compliance with the FIC Amendment Act. This includes the internal rollout of a firm’s Risk Management Compliance Programme (RMCP), which should already be in effect. To be as prepared as possible, here are some pointers to keep in mind, pending any visits to your practice.  

Gather the goods

While you will be notified and a suitable time proposed for your onsite visit, expect a full day and ensure that all key personnel are available for questioning (at any point throughout the visit). This includes senior management, Key Individuals (KIs), the person appointed in terms of section 42A (2) of the FIC Act, any staff who work with clients (representatives) and staff who work with accounts.

You will likely only be given a couple of weeks to prepare the documents for the inspection, which will include your FIC registration and authentication documents, as well as a detailed list of active clients, sharing their geographic location and risk rating, among other key factors. 

Admin-savvy

Ensure that your FIC registration details are correct on the GoAML FIC Reporting System, checking as well that the correct person is assigned to the position of FIC Compliance Officer or Money Laundering Reporting Officer.

Accountable tasks actioned

As accountable institutions must identify and verify all clients in terms of their RMCP, assigning a risk to each client, these findings and type of customer due diligence (CDD) obligations, must be applied.

The new FICA amendments make it clear that accountable institutions must additionally establish the nature, control structure and beneficial owners of legal persons, partnerships and trusts.

When a business relationship is established with a new client, the accountable institution must determine whether future transactions are consistent with the knowledge of the client (this includes the nature of the business relationship concerned, as well as the intended purpose and source of funds, which the prospective client expects to use in concluding transactions over the course of the business relationship).

Mitigate risks in line with your RMCP

If an FSP works with prominent influential persons (domestic or foreign), there are appropriate steps to take to follow the RMCP and to mitigate risks. Senior management approval will be needed to establish the relationship, verify the source of funds and monitor the relationship.

Report reality

It is required to report any suspicious activity. You have to file a cash-threshold report if the transaction exceeds R24,999.99, as well as a suspicious transaction or activity report and any terror financing/property reports too. Ongoing FICA training is an explicit requirement too, so keep this in mind.

Keeping your compliance up to date at all times, ensures that you will be more prepared for any upcoming visits, or other deadlines. Working with a qualified compliance officer can greatly assist the process. It can cost considerably more should you become uncompliant.