AML/CFT regulations in South Africa
The Financial Intelligence Centre (FIC)
The FIC was founded according to the provisions of the FIC Act. The Act operates with the Prevention of Organized Crime Act, the Protection of Constitutional Democracy Against Terrorist and Related Activities Act, the South African Police Service Act, and the National Strategic Intelligence Act.
The FIC Act requires Accountable Institutions (financial institutions and other specifically defined enterprises) to participate in the fight against money laundering and terrorist funding. POCA makes money laundering a crime and allows for the seizure and forfeiture of illegal profits. The POCDATARA Act establishes steps to combat terrorist financing.
How to comply with South Africa’s FICA rules?
Accountable Institutions include the following Institutions:
- Trust Companies
- Estate Agents
- Collective Investment Schemes
- Banks ("Business of a Bank")
- Mutual Banks
- Long Term Insurers
- Casinos (or anyone with a gambling license)
- Lenders that lend against the security of securities
- Financial Services Providers (anyone registered as an FSP), excluding short term insurance and health benefit providers
- Forex dealers and Bureau de Changes
- Travellers' Cheque dealers
- The Postbank
- The Ithala Development Finance Corporation Ltd
- Money Remitters
As an Accountable Institution, you should keep in mind the following items:
- Make sure you have a risk management and compliance programme (RMCP) in place and use a risk-based approach to customer due diligence.
- Use transaction logs to keep tabs on your customers.
- Comply with regulations by hiring a compliance officer.
- Instruct workers on how to comply with the Financial Information Security Act (FIS).
- Get registered with the FIC.
- Submit regulatory reports.
As a result, each Accountable Institution may evaluate its own risk of goods and services being used to launder money or fund terrorists and apply the required safeguards to limit these threats. Documentation of these risks and controls is provided to employees on how to comply with the Financial Information Security Act (FIS).
What are my AML/CFT reporting obligations?
If you are an Accountable Institution, you are required to notify the FIC of certain transactions and suspicious events. Included in your responsibilities:
- Transactional Cash Threshold Reports and Transactional Cash Threshold Reports Aggregated - must be provided within 48 hours of the transaction.
- Submission of International Fund Transfer Reports (IFTR) within 48 hours after the transaction is required.
- Within 15 days of the transaction or activity being deemed suspicious, suspicious transaction reports and suspicious activity reports (SARs) must be sent.
- It is mandatory to file Terrorist Financing Transaction and Transactional Reports (TFTRs) within five days after becoming aware of the fact (CPRs, TFARs, and TFTRs).