FICA compliance: from a rules-based to a risk-based approach


The deadline for accountable institutions to meet the amendments of the Financial Intelligence Centre Act, No. 38 of 2001 (FICA) legislation – introduced to counteract money laundering and the financing of terrorism – in fast approaching on 2 April 2019.

These amendments, primed by a Mutual Evaluation Report, sought to clarify those aspects of FICA which were not implemented correctly and did not prevent certain acts of financial misconduct, resulting in wasted resources. One of these amendments stemmed from non-compliance to a ruled-based approach, which prompted FICA to lead companies into taking a risk-based approach, which is outlined in Section 42 of the Act.

The Risk Management and Compliance Programme (RMCP) amendment was first introduced in October 2017. This has allowed companies about 18 months to meet its requirements. However, as this new amendment touches on every aspect of a business – including how a business deals with clients and how they are dealing with their clients’ money – it is an immense task for companies.

According to Emil Bihl, director of the Risk Management Division at Erasmus Motaung Incorporated, while riles can apply only to concrete aspects of a business, risks touch on areas that are abstract and unforeseen. “The new amendment forces accountable institutions to be actively involved in the day-to-day risks that they and their clients face and forces them to be constantly aware of developments in transactions,” he says.

To read more on how the new amendment affects companies, download the February issue of RISKAFRICA magazine now!

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