The Financial Intelligence Centre Amendment Act, 2017 (FIC Amendment Act) was signed into law by the President on 26 April 2017. At that time, the commencement dates were still to be determined. On 13 June 2017, the Minister of Finance, Malusi Gigaba, signed and gazetted the commencement dates of most of the provisions of the FIC Amendment Act.
The provisions have been spilt into three with the first set of provisions already implemented on the 13 June. The second set of provisions is scheduled to commence on 2 October. The third and last set of provisions do not have a date set out, but is expected to be implemented no later than the end of 2018.
Commencement date: 13 June 2017
These provisions do not require changes to existing regulations, exemptions or internal systems of institutions to enable compliance with the FIC Amendment Act. These provisions deal mainly with information sharing, consultation arrangements, constitutional concerns relating to inspection powers and improved functioning of the FIC Act Appeal Board.
Commencement date: 2 October 2017
The implementation of the provisions relating to customer due diligence measures, record keeping requirements, a Risk Management and Compliance programme, and Governance and Training will take effect.
The move to a risk-based approach, which modernises the way institutions conduct customer due diligence, implies that there may be less regulations. This will however require more guidance to clarify how institutions should appropriately implement the legislation.
Later Commencement dates
Sections 26A to 26C dealing with the freezing of assets in terms of the UN Security Council Resolutions on targeted financial sanctions, and Schedule 3A dealing with the setting of a monetary value threshold for companies doing business with the State, will be determined after October 2017. The delay on sections 26A to 26C is to enable consultations within Government, and allow for internal systems development.
The commencement of the FIC Amendment Act confirms South Africa’s commitment to improve compliance with the Financial Action Task Force (FATF) international standards in respect of measures on foreign Politically Exposed Persons, Beneficial Owners and record keeping. At the FATF Plenary meeting in June, South Africa is expected to report on the progress it’s made on these measures. Another report is expected to take place in October 2017.
The FIC and National Treasury notes that the full implementation of the new provisions will take time. Supervisors of accountable institutions are aware of the implementation challenges and that a transitional period is required to achieve full compliance with the FIC Amendment Act after it comes into effect. After the 2 October, relevant supervisory bodies will continue regular engagements with the relevant industries so that a timetable to reach full compliance can be agreed and put in place.
On 15 June 2017, the FIC issued the Draft Guidance to assist accountable institutions to implement the FIC Amendment Act. . This draft guidance has been issued to initiate discussions and consultation with those in the industry. Masthead will be providing commentary on behalf of our members. If you have any views and comments on the draft guidance, please send this to us (firstname.lastname@example.org) as it will assist in formulating a consolidated view from an independent financial advisor perspective.