In July 2020, the Financial Intelligence Centre (FIC) published draft Public Compliance Communication (PCC) 12A for public comment. The draft PCC provided guidance and clarity on what compliance activities can be outsourced by an accountable institution to third parties. The consultation period has since closed, and the FIC has recently published the final version of PCC 12A.
PCC 12A clarifies that outsourcing refers to when an accountable institution seeks the advice or assistance of a third-party service provider in relation to the performance of their compliance obligations. The third-party service provider cannot discharge any FIC Act obligations on an accountable institution’s behalf, and as such, an accountable institution remains liable for any compliance failures associated with or caused by such an outsourcing arrangement. PCC 12A reiterates that accountable institutions remain responsible for their compliance obligations in terms of the FIC Act regardless of their internal arrangements relating to the manner in which those obligations are met.
In terms of PCC 12A, accountable institutions may use the services of a third-party service provider to perform compliance activities relating to, inter alia:
- risk assessments and the collection and processing of documents and/or information for customer due diligence to a limited extent;
- record-keeping purposes as required in terms of the FIC Act and the Regulations to the FIC Act;
- scrutinise client information in terms of the FIC Act.
PCC 12A states that accountable institutions may not use the services of a third-party service provider to fulfil and discharge:
- customer due diligence obligations;
- reporting and registration obligations in terms of the FIC Act;
- the obligation to obtain senior management approval as required in terms of section 21F, 21G and 21H of the FIC Act which relates to customer due diligence for foreign prominent public officials, domestic prominent influential persons, and their family members and known close associates.
To read our previous article, FIC publishes draft guidance on outsourcing of compliance activities to third parties, click here.
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