South Africa has been on the FATF (Financial Action Task Force) grey list since February 2023, due to deficiencies in its Anti-Money laundering and Counter – Terrorist financing framework. As a country we will only be taken off the grey list, once a final, on-site assessment has been done and the FATF and South Africa is of the opinion that the action plan has been addressed.
South Africa has been identified as a country with strategic Anti-Money Laundering and Countering – Terrorist deficiencies. The Financial Intelligence Centre Act 38 of 2001 (FICA) was implemented to combat money laundering activities and the financing of terrorist and related activities.
In terms of the FICA, more specifically Schedule 1, FHBC is regarded as an Accountable Institution. Therefore, FHBC is registered with the FIC as a Company Service Provider and a Trust Service Provider. As an Accountable Institution, FHBC has specific obligations.
FHBC has a duty to establish and verify the identity of current as well as prospective clients and Customer Due Diligence (CDD) is a significant obligation under the FICA. To comply with legislation, FHBC need to collect and verify the following information from current as well as prospective clients:
- Identity verification
Copy of identity documents, for example ID’s, Passports, etc.
- Documentation relating to entities
CIPC documentation confirming the directors / members of an entity, the registration of an entity, ownership structure, etc.
- Documentation / Information relating to trusts
Documentation / information relating to the Founder, Trustees and named Beneficiaries. Information regarding the purpose of the trust, the source of trust funds, how the Trust acquired or will be acquiring assets, etc.
- Address verification
Documentation confirming residential / business / trust address.
- Source of Income
Information about a client’s source of income and the nature and details of business, occupation or employment.
- High-risk country residence
Confirmation whether the client has ever resided in a high-risk geographic area as listed on the FATF list.
- DPEP / FPEP / PIP status
Confirmation whether the client is a Domestic Politically Exposed Person (DPEP), Foreign Politically Exposed Person (FPEP), Prominent Influential Person (PIP) or a close associate, or an immediate family member of a DPEP, FPEP or PIP.
Keep in mind that the list of information and documentation required is not exhaustive and may vary depending on the type of client, such as an individual client, corporate client and a trust client.
Regular updates to client information are also essential to ensure ongoing compliance.
FHBC will be contacting existing clients to collect FICA information and documentation. Forms will be used to verify existing information, collect outstanding information and documentation and ensure FHBC’s compliance with regulatory requirements. The forms will be sent to current clients. FHBC will ensure that the forms are clear and concise and will provide specific instructions on what information and documentation is required from clients.
Should you have any questions or require assistance in getting your FICA process (as client of FHBC) expedited or finalised, feel free to contact our FICA Administrator, Elezia Hanekom, at elezia@fhbc.co.za.