Financial Intelligence Center Act

42 of the Financial Intelligence Center Act (FICA) No. 38 of 2001:

How Section 42 of FICA Applies to Bullion Dealers?

• Risk assessment: Bullion dealers must conduct a risk assessment to identify and assess the money laundering and terrorist financing risks associated with their business. This assessment should consider the types of bullion transactions that the dealer undertakes, the customer base, and the geographic location of the business.
• Customer due diligence: Bullion dealers must identify and verify the identity of their customers in accordance with the FICA Regulations. This includes collecting information such as the customer’s name, address, date of birth, and identity document number.
• Monitoring and reporting: Bullion dealers must monitor their transactions for signs of money laundering or terrorist financing. If a dealer suspects that a transaction is suspicious, they must report it to the FIC.
• Training: Bullion dealers must train their staff on anti-money laundering and terrorist financing compliance. This training should cover the FICA Act, the FICA Regulations, and the FIC’s guidance notes.

In addition to these requirements, bullion dealers may also be subject to additional obligations under the FICA Regulations. For example, the regulations require bullion dealers to keep records of their transactions for a period of five years.

Failure to comply with the FICA Act or the FICA Regulations can result in administrative sanctions, such as fines or the cancellation of a dealer’s registration. The FIC has issued guidance notes on the application of FICA to bullion dealers.

Guidance Note 3A on Client Identification and Verification

Guidance Note 3A provides guidance to accountable institutions on their obligations to identify and verify the identity of their customers in accordance with the Financial Intelligence Centre Act (FICA) No. 38 of 2001.

The guidance note covers the following topics:

• The purpose of customer due diligence: The purpose of customer due diligence is to ensure that accountable institutions know their customers and that they are able to identify and report suspicious transactions.
• The types of information that must be collected: The guidance note specifies the types of information that must be collected from customers, including their name, address, date of birth, identity document number, and occupation.
• The methods that can be used to collect information: The guidance note specifies the methods that can be used to collect information from customers, including visual identification, documentary identification, and electronic identification.
• The circumstances in which enhanced due diligence must be applied: The guidance note specifies the circumstances in which enhanced due diligence must be applied, such as when a customer is a politically exposed person or when a transaction is of a high value.
• The retention of records: The guidance note specifies the requirements for the retention of records of customer due diligence.

Guidance Note 3A is an important resource for accountable institutions who are seeking to comply with their obligations under FICA. The guidance note provides detailed and practical guidance on the specific requirements for customer due diligence.

Here are some additional points to note about Guidance Note 3A:

• The guidance note is updated regularly to reflect changes in the law and in the risk environment.
• The guidance note is available in English and Afrikaans.
• The guidance note is free to download from the FIC’s website.

Guidance Note 3B: For accountable institutions on monitoring and reporting of suspicious and unusual transactions and activities

Guidance Note 3B provides guidance to accountable institutions on their obligations to monitor and report suspicious transactions and activities in accordance with the Financial Intelligence Centre Act (FICA) No. 38 of 2001.

The guidance note covers the following topics:

• The definition of a suspicious transaction: The guidance note defines a suspicious transaction as “any transaction or activity that gives rise to a reasonable ground for suspicion that it may involve money laundering or terrorist financing.”
• The circumstances in which a transaction or activity may be suspicious: The guidance note specifies the circumstances in which a transaction or activity may be suspicious, such as when the transaction is unusually large or complex, or when the customer is acting in a way that is inconsistent with their known business or personal activities.
• The process for reporting suspicious transactions: The guidance note specifies the process for reporting suspicious transactions, including the information that must be included in the report and the steps that must be taken to preserve the evidence.
• The confidentiality of reports: The guidance note emphasizes the importance of confidentiality in relation to reports of suspicious transactions.

Guidance Note 3B is an important resource for accountable institutions who are seeking to comply with their obligations under FICA. The guidance note provides detailed and practical guidance on the specific requirements for monitoring and reporting suspicious transactions.

Here are some additional points to note about Guidance Note 3B:

• The guidance note is updated regularly to reflect changes in the law and in the risk environment.
• The guidance note is available in English and Afrikaans.
• The guidance note is free to download from the FIC’s website.