FINANCIAL INTELLIGENCE CENTRE ACT

These requirements will include documentation relating to the KYC(Know-Your-Customer) regulations as well. The FICA / KYC regulations apply for all clients/customers even if having recently transacted with us.

WHAT IS FICA?

Money laundering is the process by which money obtained from illegal sources is given the appearance of having come from a legitimate source.

The majority of criminal activities are perpetrated to achieve one thing – Money! If money is generated by crime, it is useless unless the original tainted source or intended usage of funds can be disguised as it could connect the criminals to the illegal activity and law enforcement officials would seize it.

In today’s globalised economy, criminals can generates huge sums of money through fraud, drug trafficking, arms smuggling and many other heinous crimes. These criminals are constantly adapting their activities to disguise their “dirty money” and targeting financial institutions. Not only does this cost countries billions a year, it is also providing the resources for international terrorism to grow.

Governments and international bodies have undertaken efforts to deter prevent and apprehend money launderers. Financial institutions have likewise undertaken efforts to prevent and detect transactions involving “dirty money”, both as a result of government requirements and to avoid the reputational risk involved.

In 2001, the South African government introduced the Financial Intelligence Centre Act (“FICA”) and other applicable Anti Money Laundering and Countering of the Financing of Terrorism legislation to combat money laundering and the financing of terrorism. FICA contains a number of control measures aimed at facilitating the detection and investigation of money laundering and terrorist financing and imposes specific responsibilities on financial institutions that relate to commencing a business relationship with a client as well as during the lifecycle of the business relationship. This includes, inter alia, the requirement to “Know Your Client” (KYC) by establishing and verifying the identity of all clients prior to establishing a business relationship or concluding a transaction.

In addition, information should be updated on a regular basis to ensure client information remains accurate and up-to-date as well as to align to any changes in legislative and/or global industry standards.

WHO IS RESPONSIBLE?

  • INDIVIDUALS
  • SOLE PROPRIETORSHIPS
  • PARTNERSHIPS
  • CLOSE CORPORATIONS
  • SOUTH AFRICAN COMPANIES (EXCLUDING PUBLIC COMPANIES ON APPROVED EXCHANGES)
  • PUBLIC COMPANIES (APPROVED EXCHANGES)
  • FOREIGN COMPANIES (EXCLUDING PUBLIC COMPANIES ON APPROVED EXCHANGES)
  • TRUSTS
  • OTHER LEGAL ENTITIES