Further pressure to comply with FICA

Julie Methven

Failure to fully comply with anti-money laundering legislation will become more risky on 1^st December. This is when the Financial Intelligence Centre Amendment Act comes into force.

The Amendment Act improves the position of the Financial Intelligence Centre and the supervisory bodies that support it in enforcing compliance with the Financial Intelligence Centre Act (FICA). It strengthens the power of these bodies and provides for greater penalties for contravention – up to R10million for individuals and R50 million for institutions. Those who fall into its net are known as accountable and reporting institutions and include a wide range of financial services providers, estate agents, attorneys, accountants and casinos among others.

Signed into law in 2008, the Amendment Act was delayed for two years to give the Centre and supervisory bodies, who act as its watchdogs, time to put the necessary systems, personnel and processes into place. It also gave the legislators time to consult on and amend the list of accountable and reporting institutions.

According to the Centre, the Amendment Act is the first phase in a process of reviewing the

current legislative framework with a view to improving South Africa’s legal and institutional framework and to strengthen the implementation of measures to combat money laundering and terrorist financing.

Julie Methven, CEO of the Compliance Institute of South Africa says the Amendment Act has profound ramifications for compliance.

“We anticipate that supervisors will have ramped up their own understanding and application of FICA to start engaging with those affected by the legislation far more rigorously,” she said.

Supervisors include the Financial Services Board, the Reserve Bank, the Registrar of Companies, the Estate Agency Affairs Board, the Independent Regulatory Board for Auditors, the National Gambling Board, the JSE and the Law Society.