FIC: Accurate Completion of Risk and Compliance Return

FIC: Accurate Completion of Risk and Compliance Return

• 23 October 2023
• Legal and Compliance
• South African Accounting Academy

The FIC’s risk-based supervision capability is enhanced by the regulatory requirements of Directive 6 and Directive 7. These Directives serve to inform all the specified accountable institutions, called designated non-financial businesses and professions (DNFBPs) by the Financial Action Task Force (FATF), that they must submit information regarding their understanding of the risks they face of money laundering (ML), terrorist financing (TF) and proliferation, and their assessment of compliance with obligations in terms of the FIC Act.

Accordingly, these affected accountable institutions are obliged to file a self-assessment on anti-money laundering, combating terrorist financing and combating proliferation financing, referred to as the RCR. Failure to submit can lead to administrative action. The FIC uses a risk-rating tool to analyse the data from RCRs to identify higher-risk DNFBPs as a basis for risk-based supervision consideration, and inclusion in the supervisory plan.

Directive 6 obliged the following accountable institutions designated as items listed in Schedule 1 to the Financial Intelligence Centre Act, 2021 (Act 38 of 2001) (FIC Act) to complete and submit their RCRs by 31 May 2023: legal practitioners (item 1), trust and company service providers (item 2), estate agents (item 3) and gambling institutions (item 9).

Directive 7 obliged the following accountable institutions designated as items listed in Schedule 1 to the FIC Act, to complete and submit their RCRs by 31 July 2023: credit providers (item 11), South African Post Bank (item 14), high-value goods dealers (item 20), South African Mint Company (item 21) and crypto asset service providers (item 22).

This notice serves to confirm that: 

1. Only accountable institutions that have successfully registered with the FIC on its registration and reporting platform (goAML), and who have received a FIC organisation identity number (Org ID), may submit an RCR. 

2. Accountable institutions shall not submit an RCR if they have not registered with the FIC and received a FIC Org ID. 

3. If the accountable institution is not yet registered with the FIC, the accountable institution is requested to immediately register by accessing www.goweb.fic.gov.za/goAMLWEb_PRD/Home. 

4. All accountable institutions must submit a separate RCR for each Scheduled item registered with the FIC. This means that a separate RCR must be submitted for each FIC Org ID held by an accountable institution. This requirement applies to entities with branch networks, and entities that offer multiple offerings across the FIC Schedule items. 

5. Only one RCR submission is permitted per accountable institution for each FIC Org ID held. 

6. The FIC urges compliance officers to clearly communicate the requirement for submission of RCRs internally in their institutions to avoid duplicate submissions. 

7. Accountable Institutions must accurately capture and state their FIC Org ID number in the RCR return. In the Org ID field, only the FIC goAML generated Org ID is to be captured, not a personal ID number nor the company registration number. 

Non-compliant accountable institutions that have not yet submitted their RCRs, by Friday, 13 October 2023, will be sanctioned with an administrative sanction (which may include a financial penalty), by the FIC.

Click here to download the FIC Notice:

https://www.fic.gov.za/Documents/231005_Risk%20and%20Compliance%20Return_Correct%20Submission%20Notice_Issued.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

• The Financial Intelligence Centre Act (FICA) is yet another piece of legislation that your clients must comply with, and which you must assess compliance with.  If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (Non-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.

• As an auditor and independent reviewer, you need to consider amendments, regulations and directives that are gazetted relating to FIC and accountable institutions, to ensure that your clients (or even your own practice) comply with their reporting obligations.

Relevance to Your Clients:

• Relevant entities (specifically accountable institutions) have a duty to comply with the FIC Act, otherwise they could be held liable.

• Relevant entities should be aware of amendments, regulations and directives that are gazetted relating to FIC and accountable institutions, to ensure that they comply with their reporting obligations.

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