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FIC: PCC 6A – Guidance on the Definition of Trust and Company Service Providers
- 22 August 2023
- Accounting
- South African Accounting Academy
The guidance also includes examples of the money laundering and terrorist financing risks the sector faces.
In summary:
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A trust and company service provider (TCSP) is any person in the ordinary course of business who assists their client in the creation, operation and management of a company, or of an external company, a foreign company, a close corporation or a trust. This includes attending to the registration of the business entity with the relevant authority.
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A person who performs the activities of a TCSP, regardless of the professional accreditation they hold, is an accountable institution and must register as a TCSP with the Financial Intelligence Centre (FIC). TCSPs can include accountants, attorneys or other professionals.
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Given the unique nature of the services they offer, TCSPs are vulnerable to abuse by entities seeking to misuse corporate structures to facilitate the movement of illicit funds. There are several listed money laundering (ML), terrorist financing (TF) and proliferation financing (PF) risk indicators that TCSPs should consider.
Click here to download the Guidance document:
https://www.fic.gov.za/Documents/PUBLIC%20COMPLIANCE%20COMMUNICATION%20No6A.pdf
Relevance to Auditors, Independent Reviewers & Accountants:
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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.
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As an auditor and independent reviewer, you need to consider amendments and regulations that are gazetted relating to FIC – specifically whether you and/or your clients meet the amended definition of an accountable institution.
Relevance to Your Clients:
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Relevant entities (specifically accountable institutions) have a duty to comply with the FIC Act, otherwise, they could be held liable.
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Relevant entities should be aware of amendments and regulations that are gazetted relating to FIC – specifically whether they meet the amended definition of an accountable institution.