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THE FINANCIAL INTELLIGENCE CENTRE ACT (FICA)

We are delighted to report that Compliance Hub consulting and Nexus Forensic auditors have joined forces to assist companies with this act !


The Financial Intelligence Centre Act (FICA) is a South African law that was enacted in 2001. The purpose of FICA is to prevent and combat money laundering and terrorist financing.


The Financial Intelligence Centre Act (FICA) of South Africa requires certain types of companies to implement and maintain a Risk Management Compliance Programme (RMCP). These companies are known as "accountable institutions" and they include:

  • Banks

  • Financial institutions

  • Payment services providers

  • Money service businesses

  • Trustees

  • Insurance companies

  • Securities dealers

  • Exchanges

  • Warehouse receipts issuers

  • Commodity brokers

  • Investment managers

  • Administrators of collective investment schemes

  • Fund managers

  • Credit providers

  • DNFBPs

Legal companies are included in the list of accountable institutions that are required to implement and maintain a Risk Management Compliance Programme (RMCP) in terms of the Financial Intelligence Centre Act (FICA) of South Africa. The FIC defines a legal company as "a company, close corporation or other legal entity that is incorporated or constituted in terms of the laws of South Africa or any other country."


This means that all legal companies that are registered to do business in South Africa are required to comply with FICA, including the RMCP requirements.

  • Law firms

  • Accounting firms

  • Trust companies

  • Property companies

  • Investment companies

  • Insurance companies

  • Securities dealers

  • Exchanges

  • Warehouse receipts issuers

Construction companies are required to comply with the Financial Intelligence Centre Act (FICA) of South Africa. FICA is a set of regulations designed to prevent money laundering and terrorist financing. Construction companies are considered "accountable institutions" under FICA, which means that they are required to implement and maintain a Risk Management Compliance Programme (RMCP).


The RMCP must be designed to identify, assess, monitor, mitigate, and manage the risk that the provision by the accountable institution of products or services may involve or facilitate money laundering activities or the financing of terrorist and related activities. The RMCP must be documented and maintained in writing and must be reviewed and updated on a regular basis.


Accountable institutions that fail to implement and maintain a RMCP in accordance with FICA may be subject to civil and criminal penalties.


Here are some additional details about the RMCP requirements:

  • The RMCP must be tailored to the specific risk profile of the accountable institution.

  • The RMCP must include policies and procedures for customer due diligence, record-keeping, and reporting.

  • The RMCP must be implemented and maintained by the accountable institution's management.

  • The RMCP must be reviewed and updated on a regular basis.

  • The Financial Intelligence Centre (FIC) of South Africa provides guidance on the RMCP requirements in its publications, including the FICA Risk Management and Compliance Programme Framework. The FIC also offers a range of training and support services to help accountable institutions comply with FICA.

Compliance Programme (RMCP) in terms of the Financial Intelligence Centre Act (FICA).

Your firm will be required to fulfil certain regulatory obligations, such as:

  • Establish and verify the identity of clients - this can be done on the Nexus intel system for a pay per search basis as demonstrated.

  • Understand the nature and purpose of a transaction/relationship.

  • Keep records of business relationships and transactions - this is done on the Nexus intel system for a pay per search basis.

  • Screen against sanctions watchlists this is done on the Nexus intel system for a pay per search basis.

  • Report receipts of cash above a prescribed amount to the FIC this is done on the Nexus intel.

  • Report suspicious transactions or activities to the FIC this is done on the Nexus intel.

  • Document internal processes consistent with obligations under the FICA- this is done on the Nexus intel system.

  • Offer compulsory FICA training to all employees - Nexus does this training for your company.

  • Appoint a compliance officer- company compliance.

  • Identify the source of funds for transactions, this is done on the Nexus intel system.

Details on how Accounting and Auditing firms must develop, implement, and maintain a Risk Management Compliance Programme (RMCP) in terms of the Financial Intelligence Centre Act (FICA):


1. Establish and verify the identity of clients- this can be done on the Nexus intel system for a pay per search basis as demonstrated.

The first step in any RMCP is to establish and verify the identity of clients. This includes collecting information such as the client's name, address, date of birth, and identity number. The firm should also verify the client's identity by checking their identification documents, this is done on the Nexus intel system for a pay per search basis as demonstrated.


2. Understand the nature and purpose of a transaction/relationship, this can be done on the Nexus intel system.

Once the client's identity has been established, the firm should understand the nature and purpose of the transaction or relationship. This includes understanding the source of the funds, the intended use of the funds, and the purpose of the transaction - Nextel system does this.


3. Keep records of business relationships and transactions -normal accounting record keeping.

The firm must keep records of all business relationships and transactions. These records should include the date of the transaction, the amount of the transaction, the purpose of the transaction, and the identity of the parties involved. Normal accounting practice.


4. Screen against sanctions watchlists - this can be done on the Nexus intel system against the UN List for a pay per search basis as demonstrated.

The firm must screen all clients against sanctions watchlists. Sanctions watchlists are lists of individuals and entities that are subject to sanctions by the government. If a client is found on a sanctions watchlist, the firm must take appropriate action, such as refusing to do business with the client.


5. Report receipts of cash above a prescribed amount to the FIC- Reporting requirement.

The firm must report receipts of cash above a prescribed amount to the FIC. The prescribed amount is currently R25,000. This means that the firm must report any cash transaction that is equal to or greater than R25,000.


6. Report suspicious transactions or activities to the FIC.

The firm must report suspicious transactions or activities to the FIC. Suspicious transactions are transactions that appear to be linked to money laundering or terrorist financing. The firm must report any suspicious transaction or activity to the FIC, even if the firm is not sure if the transaction is actually linked to money laundering or terrorist financing.


7. Document internal processes consistent with obligations under the FICA - this can be done on the Nexus intel system.

The firm must document its internal processes consistent with its obligations under the FICA. This documentation should include the firm's policies and procedures for customer due diligence, transaction monitoring, and reporting.


8. Offer compulsory FICA training to all employees Nexus can do this.

The firm must offer compulsory FICA training to all employees. This training should cover the firm's policies and procedures for customer due diligence, transaction monitoring, and reporting.


9. Appoint a compliance officer.

The firm must appoint a compliance officer. The compliance officer is responsible for ensuring that the firm complies with the FICA.


10. Identify the source of funds for transactions.

The firm must identify the source of funds for transactions. This includes understanding where the funds came from and why the funds are being transferred. By following these steps, firms can develop, implement, and maintain an RMCP that will help them to comply with the FICA.


Need a demo or training on this act please contact us and we will gladly assist you!

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