FIC Act reporting-2

Where an FSP identifies prospective client(s) or existing client(s) as being listed as a sanctioned person, the FSP must not conduct any transactions on behalf of that person(s). Where an FSP possesses or controls property of a person/entity who:

Has committed an offence in terms of the Protection of Constitutional Democracy against Terrorist and Related Activities Act (POCDATARA Act)

Is listed in terms of the POCDATARA Act

Is listed in a section 26A FIC Act notice

then that FSP must submit a section 28A TPR to the FIC. The fact that an FSP has certain funds (property) in its possession or under its control is sufficient to prompt a report. No transaction activity relating to that funds is required to trigger the reporting obligation, the mere fact that a client is listed on a sanctions list and the FSP has control over the client’s funds warrants the filing of a report. FIC guidance note 6A provides insight on this reporting obligation. In addition, the FIC’s PCC 44 provides guidance on the application of the targeted financial sanctions regimes within South Africa.

International funds transfer reporting (IFTR)

Section 31 of the FIC Act sets out the IFTR obligation, which section has not commenced as yet. The proposed draft IFTR regulations are also pending finalisation. Once in operation, it is envisioned that only certain accountable institutions will be required to report IFTR’s which exceed the prescribed threshold.

The FIC has published draft guidance note 104 which sets out the proposed requirements relating to IFTR reporting.

Risk management and compliance programme

FSPs are required to develop, document, maintain and implement a risk management and compliance programme (RMCP) for anti-money laundering and counter terrorist financing. As part of the RMCP, the FSP must indicate how it will conduct account monitoring, monitor client transactions and file regulatory reports in compliance with the FIC Act.

FSPs are obliged to register with and submit the various regulatory reports to the FIC. Before they can begin to submit regulatory reports, FSPs must first register with the FIC. Refer to the FIC website on www.fic.gov.za for the various FIC public compliance communications, guidance notes, reporting user guides and registration user guides.

For further information please contact the FIC’s compliance contact centre on +27 12 641 6000 and select option 1. Alternatively log an online compliance query by clicking on: http://www.fic.gov.za/ContactUs/Pages/ComplianceQueries.aspx or visit the FIC’s website and submit an online compliance query.