Accountable Institutions are required to know the clients that they deal with. Part of the customer due diligence requirements in terms of the Financial Intelligence Centre (FIC) Act, is that accountable institutions must determine if they are dealing with a person or entity on the Targeted Financial Sanctions (TFS) List. Accountable institutions are required to scrutinise the information which they have regarding their clients and, if necessary, to report this to the FIC. Most recently, the requirement to screen information against the TFS list has extended beyond clients, to employees of accountable institutions.
The FIC explains that TFS measures generally restrict sanctioned persons and entities from having access to funds and property under their control and from receiving financial services in relation to such funds and property. In order for these sanctions to be given effect, the FIC Act requires accountable institutions to freeze property and transactions pursuant to financial sanctions imposed in the United Nations Security Council (UNSC) Resolutions. [1]
The FIC recently issued an advisory that makes provision for persons and entities who are designated on a TFS list to be delisted upon request.
There are two different delisting processes. These processes differ depending on which UNSC resolution TFS list the persons or entities are designated. A designated person or entity can approach the UNSC Ombudsperson or Focal Point directly, alternatively the Department of International Relations and Cooperation (DIRCO) may assist. The advisory sets out the processes and relevant contact details for the Ombudsperson, Focal Point and DIRCO.
Accountable institutions are reminded that no person may enter into any transaction or establish a business relationship with persons or entities on the TFS and UN sanctions lists. Where a person or entity indicates that they have requested to be delisted, it is advisable to not do any business with them until they are in fact no longer appearing on the list – this should be considered using a risk-based approach and in accordance with the processes set out in the institution’s Risk Management and Compliance Programme. Accountable institutions must keep evidence of sanctions screenings conducted.