What Are FICA Documents in South Africa?

What Are FICA Documents in South Africa?

The Financial Intelligence Center Act 38 of 2001 is referred to as FICA (as amended). The Act was established to combat financial crimes like identity theft, tax evasion, money laundering, and other types of fraud. The Act was revised in 2017 to put South Africa in line with global guidelines established by the Financial Action Task Force for preventing the financing of terrorism and money laundering.

FICA’s function and why it’s necessary

FICA is a legal framework that was created to help identify the proceeds of illegal activity and to fight money-laundering, terrorist financing, and tax evasion-related crimes. FICA has several controls in place to make sure that money laundering is recognized and looked into.

FICA’s control mechanisms mandate that:

Accountable Institutions must adopt a risk-based approach, which necessitates that they have a thorough grasp of how their goods and services might be used to finance terrorism and money laundering and how to reduce that risk.

Customer It is necessary to undertake due diligence, which holds accountable institutions accountable for knowing who they are doing business with.

The required standards for record-keeping must be followed.

Accountable Institutions are expected to conduct sanctions screening and, under certain conditions, to report to the FIC.

Accountable Institutions are required to create, establish, manage, and implement a Risk Management and Compliance Programme (“RMCP”) that consists of policy papers, procedures, systems, and controls.

Directors or top management are responsible for compliance in a legal company.

Who is subject to FICA?

The Act is applicable to all Accountable and Reporting Institutions, as described in Schedule 1 of the Act, and they must abide by its rules. The list includes financial service providers, lawyers, trustees, executors, estate agents, car dealers, investment management firms, bankers, and more.

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Act amending FICA

The Financial Intelligence Centre Act (FICA) Schedules 1, 2, and 3 were subject to proposed changes that were released for public comment on June 19, 2020. With the proposed changes, FICA would be brought into compliance with both recent legal modifications and the Financial Action Task Force’s (FATF) current International Standards.

Although the regulations have not yet taken effect, it is not too early to start preparing so that you can fulfill the requirements of the FICA modifications.

Who will these revisions affect?

All Accountable Institutions, including FSPs, attorneys, and estate agents, will be impacted by the FIC revisions. Dealers of high value goods and automobiles would also be affected. The revisions also include Crypto Asset Service Providers (CASPs), a step toward regulating crypto currencies.