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The key amendment introduced is a shift from a rules-based approach
to a risk-based approach in ensuring FICA compliance, which simply
means that accountable institutions must consider the potential risk
involved with establishing a business relationship or concluding a
single transaction with a particular client.
Accountable institutions are obliged to conduct “client due diligence”
(“CDD”) to establish and verify the identities of their clients. Essentially
you are required to know who your client is with whom you are doing
Commercial relating to ongoing CDD and the monitoring of business relationships,
business. The Amendment Act now imposes enhanced measures
as well as obligations in respect of prominent and influential persons.
The Amendment Act also introduces additional due diligence
measures relating to legal persons, trusts and partnerships. Client
due diligence processes will therefore need to be reviewed by every
accountable institution.
Accountable institutions are obliged to develop, document, implement
and maintain a Risk Management and Compliance Programme,
which sets out the FICA compliance obligations of the business
and its procedures for ensuring that these obligations are met. The
Amendment Act dictates that the Risk Management and Compliance
Programme replaces the formerly required FICA internal rules of the
organisation.
Employees of accountable institutions must receive comprehensive
and ongoing training on FICA in accordance with their Risk
Management and Compliance Programme to ensure that employees
are aware of their duties in terms of FICA when engaging with clients.
The board of directors (for legal persons) and the person with the
highest level of authority (non-legal persons) are now tasked with
ensuring compliance with FICA. A specific individual with sufficient
competence and seniority may be appointed to assist with ensuring
compliance with FICA, which appointment is similar to the previous
FICA compliance officer.
If one looks at the amendments introduced by the Amendment Act,
all accountable institutions will need to review their current FICA
frameworks to address the changes identified above. Although the
Amendment Act has been signed, it has not yet come into operation,
which does provide your organisation opportunity to timeously address
your FICA compliance in line with the new amendments.

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