The Financial Intelligence Centre Amendment Bill (FICA) received the green light last month after being signed into law by President Jacob Zuma.
The Financial Intelligence Centre Amendment Act amends the Financial Intelligence Centre Act, 2001 which aims to fight financial crimes, such as money laundering, tax evasion and terrorist financing activities.
The Act hopes to further ensure transparency and integrity within the country’s financial system, the Presidency said in a statement.
The implications the Act has on South African businesses is considerable and should not be taken lightly.
Not only are the various requirements of the Act stringent, if convicted of an offense, the penalties can be severe, according to a blog post on Eduflex.com, an electronic learning and publishing solutions provider.
It is critical that businesses affected by the Act understand and fulfill their responsibilities in terms of the Act, the post explains.
Who Does The Act Affect?
FICA identifies what it refers to as “accountable institutions” which include banks, estate agents, attorneys and businesses providing money remittance services, long-term insurance services and foreign exchange, among others.
In addition to the accountable institutions, the Act affects all clients and consumers who enter into either a single transaction or a business relationship with them.
If your business falls within any of these categories FICA will have a major effect on how you do business.
Here are 5 ways that businesses will be affected by the 2017 FICA Amendment Bill:
1. Business owners, as well as others who own or control the business (beneficial owners) will be expected to be identified to prevent the misuse of legal entities to commit crimes such as tax evasion;
2. The customer due diligence process will have to be improved to ensure that business owners fully understand the nature and potential risks posed by their customers;
3. Business owners will be required to identify, assess and understand the money laundering and terror finance risks their businesses faces in terms of the products and services they offer their clients;
4. Businesses will have to make provision for the freezing of assets relating to customers or clients associated with terrorism in line with United Nations Security Council Resolutions;
5. Every business is expected to be responsible with regards to the collecting, processing, storing and sharing of another entity’s personal information in line with the Protection of Personal Information Act (POPI Act);
6. The Amendment bill provides for inspection powers for regulatory compliance purposes in accordance with the Constitution; and
7. The Bill enhances certain administrative and enforcement mechanisms.