The Financial Intelligence Centre (FIC) recently published its Annual Report. During the 2023/24 period the FIC was at the forefront of implementing regulatory reforms for anti-money laundering and countering the financing of terrorism (AML and CFT).
Highlights
The FIC worked closely with various government departments, entities and agencies in contributing to South Africa’s collective effort to address the grey list action items and strengthen its AML and CFT regime. Among the action items was the implementation of beneficial ownership transparency and reporting reforms with the FIC taking part in working groups and leading consultations with private and public sector stakeholders.
The FIC’s fight against financial crime during 2023/24 included producing a total of 3 924 financial intelligence reports that directly contributed to the recovery of R98.5 million in criminal proceeds. In addition, the FIC blocked R295.8 million as suspected proceeds of crime involving 208 bank accounts.
Organisational achievements during 2023/24 include, amongst others, developing and implementing the Risk and Compliance Analysis Assessment tool to assist in risk assessment, hosting webinars to improve compliance, and establishing the Shared Forensic Capability within the FIC and providing forensic support. In addition, the FIC issued 8 guidance notes during the period, these related to various topics for existing and newly added accountable institutions:
- Guidance Note 8 on SARB PA Directive 01 of 2022;
- PCC 57 on Crypto Asset Service Providers;
- PCC 6A on Trust and Company Service Providers;
- PCC 47A on Legal Practitioners;
- PCC 5D on Registration with the FIC;
- Guidance Note 9 on International Transfer of Funds Reporting;
- PCC 44A on Targeted Financial Sanctions; and
- PCC 58 on High Value Goods Dealers.
Risk and compliance returns
Lack of understanding of the money laundering and terrorist financing risks faced by designated non-financial businesses and professions (DNFBP) was a contributing factor to South Africa being grey listed by the Financial Action Task Force (FATF). To address this deficiency among DNFBPs, the FIC developed and implemented the Risk and Compliance Return (RCR) online questionnaire. The information contained in the RCRs assists the FIC in understanding the institutions and their levels of risk exposure, so that appropriate risk-based approach supervision may be applied.
Institutions that had to complete the RCR included legal practitioners, trust and company service providers, estate agents, gambling institutions, credit providers, the South African Postbank, high-value goods dealers, The South African Mint Company and crypto asset service providers.
Compliance Inspections
In 2023/24, the FIC conducted 558 inspections. Of these inspections, 269 specifically scrutinised the non-submission of RCRs. The remaining inspections were targeted at one or more of the other compliance obligations under the FIC Act.
The business sectors with the highest FIC Act inspection reports issued include legal practitioners (273) and estate agents (220).
While the FSCA, as a supervisory body, issued 48 FIC Act inspection reports on the FSP division, 29 reports on authorised users of exchange, and 10 reports on collective investment scheme managers.
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Click here to read the FIC’s Media Release
Click here to read the FIC’s Annual Report