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FICA Handbook for Law Firms
- 03 May 2023
- Accounting
- South African Accounting Academy
Section 45 of the Financial Intelligence Centre Act (FICA) provides that supervisory bodies are responsible for both supervising and enforcing compliance with FICA by all Accountable Institutions. All attorneys are Accountable Institutions and subsequently subject to FICA compliance.
The Financial Intelligence Centre Act came into effect on 1 July 2003 and was updated in 2017 by the Financial Intelligence Centre Amendment Act 1 of 2017 (FIC Amendment Act).
It is a legal requirement for Accountable Institutions to comply with FICA in order to deter, identify and report money laundering, terrorist and proliferation financing.
To achieve this, the FIC requires Accountable Institutions to fulfil various FICA obligations, such as:
- To establish and verify the identity of clients.
- To understand the nature and purpose of a transaction/relationship.
- To keep records of business relationships and transactions.
- To screen against sanctions watchlists.
- To report receipts of cash above a prescribed amount to the FIC.
- To report suspicious transactions or activities to the FIC.
- To document internal processes consistent with obligations under FICA.
- To offer compulsory FICA training to all employees.
- To appoint a compliance officer.
- To identify the source of funds for transactions.
Click here to download the FICA Handbook:
https://share-eu1.hsforms.com/1ieRXp4NrTKmpnFmF2D_qqgetu2j
Relevance to Auditors, Independent Reviewers & Accountants:
- 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, independent reviewer and accountant, you need to be aware of handy tools that you and your clients can use in practice – especially those published by supervisory bodies, like the LPC.
- You need to consider that your clients who are law firms, are regarded as accountable institutions, and whether they are complying with their responsibilities in terms of FICA.
Relevance to Your clients:
- A law firm is an accountable institution, and has a duty to comply with the FIC Act, otherwise they could be held liable.
- Your clients need to be aware of handy tools that they can use in practice.
To stay current with all the latest changes and updates subscribe to our Monthly Compliance and Legislative Update series for R 250.00 per month. This gives you access to a monthly 2-hour webinar and monthly newsletter:
https://accountingacademy.co.za/profession/monthly-legislation-update
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