Financial Intelligence Centre Act (FICA) | South Africa

The Financial Intelligence Center Act (FICA) came into force in 2003 on financial crimes such as anti-money laundering, financing terrorism, and tax evasion in South Africa.

What Is The Financial Intelligence Centre Act (FICA)?

The Financial Intelligence Center Act (FICA) entered into force on July 1, 2003, to combat financial crimes in South Africa. Besides, FIC was changed on April 29, 2017. This act aims to make it compliant with similar legislation of other countries and prevent criminal activities from preventing and revealing the revenues from illegal activities in South Africa. In South Africa, institutions that must comply with anti-money laundering regulations and obligations can enroll in this law with the Green barcoded South African ID cards or smart ID cards. In addition, FIC has powers other than anti-money laundering and combatting terrorist financing, some of which are: monitoring financial institutions to see if they comply with regulations, determining criminal proceeds, and improving compliance with the law.

What Is The Role of FICA in South Africa?

The Financial Intelligence Center Act (FICA), a law that controls and regulates money laundering and terrorist financing in South Africa, was originally founded on the Financial Action Task Force (FATF). South Africa is one of the member states obliged to comply with the FATF 40 recommendations, so AML laws must also comply with the FATF 40 recommendations. FATF 40 recommendations include military procedures that must be followed by regulated agencies in Guinea Africa.

What Are The Sectors Regulated Under FICA?

In general, although the regulated institutions in countries are financial institutions such as banks, there are some sectors other than these institutions, which also commit crimes such as money laundering and terrorist financing. There are some sectors regulated under the FIC law in South Africa. These sectors can be summarized as follows:

  • financial institutions
  • brokers
  • lawyer firms
  • real estate agents
  • insurance companies
  • accountants
  • trust companies
  • money transfers services
  • virtual currency exchanges
  • some auctioneers
  • some loan providers

FIC Act’s AML Requirements

FIC Act has certain specific requirements and obligations, and these requirements have been revised and strengthened after South Africa's Financial Intelligence Centre Amendment Act. At this point, the institutions mentioned above and more must comply with this law's requirements. Suppose these institutions fail to comply with the obligations of the FIC law. In that case, they are subject to some administrative sanctions, such as fines of up to 100 million rupees, and in cases of more severe crimes, imprisonment. For this reason, regulated institutions are required to establish an AML Compliance Program in their businesses in accordance with the obligations and then comply with this program. The requirements of the FIC Act are as follows:

  • Verifying the identity of new customers and re-authenticating existing customers at required intervals. Performing Know Your Customer (KYC), and Customer Due Diligence (CDD) measures appropriate for this verification.
  • Following a risk-based approach within the organization and making this approach unique for each client.
  • Performing required risk assessments and risk management.
  • Institutions determining Adverse Media data, Sanctions, Politically Exposed Persons (PEPs)
  • Keeping records for suspicious behaviors and reporting these records and submitting them to the necessary institutions
  • Having a trained compliance officer responsible for auditing or reporting the AML Compliance Program for the organization.
  • Performing a sanction screening for the institution as specified in the law.

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