Regulation 4 (3) of the Money Laundering Control Regulations, requires that an institution use "information which can reasonably be expected to achieve" verification of an address. In the view of the Centre the address slips issued by Home Affairs does not constitute information which can reasonably be expected to achieve verification of a person's current address, as it is not an independent source document and may be outdated and therefore not reflect current information.
Regulation 4 of the Money Laundering Control Regulations concerning the verification of a person’s identity is based on a view that the client is met face-to-face when his or her particulars are obtained. This implies that the original identity document and originals or certified copies of other documents will be sighted as part of the verification process. Copies of these documents can then be made for record keeping purposes.
Regulation 18 of the Money Laundering and Terrorist Financing Control Regulations provides for instances where client information is obtained in a non face-to-face situation. In such cases institutions “must take reasonable steps” to confirm the existence of the client and verify the identities of the natural persons involved. This implies that documents which are certified as true copies of originals may be accepted, but an institution would have to take additional steps to confirm that documents are in fact those of the client in question. Decisions concerning the additional steps to be taken in cases of a non face-to-face situation should be based on an accountable institution’s risk framework.
A politically exposed person or PEP is the term used for an individual who is or has in the past been entrusted with prominent public functions in a
particular country. The principles issued by the Wolfsberg Group of leading international financial institutions give an indication of best banking
practice guidance on these issues. These principles are applicable to both domestic and international PEPs.
The following examples serve as aids in defining PEPs:
In terms of the FATF standards, specific action should be taken in relation to PEPs as a category of high-risk client. In addition to performing customer
due diligence measures, accountable institutions should put in place appropriate risk management systems to determine whether a customer, a potential
customer or the beneficial owner is PEP. In addition, accountable institutions should:
It is crucial that accountable institutions address the issue of PEPs in their risk framework, referred to in paragraph 2, and group money laundering
control policy. PEPs should be regarded as high-risk clients and, as a result, enhanced due diligence should be performed on this category of client.
Heightened scrutiny has to be applied whenever PEPs or families of PEPs or closely associated persons of the PEP are the contracting parties or the
beneficial owners of the assets concerned, or have power of disposal over assets by virtue of a power of attorney or signature authorisation.
The Wolfsberg principles provide additional guidance on how to recognise and deal with a PEP. In addition to the standardised identification and
verification procedures, the following prompts are appropriate to recognise PEP:
The FIC Act requires a person who carries on a business, or is in charge of or manages a business, or who is employed by a business, and who has a suspicion of money laundering or terror financing activity or unusual transaction, to report this to the Centre.
Each and every business must be involved in the fight against crime by filing suspicious and unusual transactions to the Centre. Your reports will assist the Centre in the fight against money laundering and the financing of terrorism. By reporting suspicious and unusual transactions, businesses will minimise the risk of the proceeds of crime in the country’s financial system. This can lead to a safer business operating environment. Crime and money laundering risk can be minimised when businesses take necessary measures to recognise suspicious and unusual transactions
A suspicious transaction will often be one when the transaction raises questions or gives rise to discomfort, apprehension or mistrust. When considering
whether there is reason to be suspicious of a particular situation one should assess all the known circumstances relating to that situation. This includes
the normal business practices and systems within the industry where the situation arises.
A suspicious situation may involve several factors that may on their own seem insignificant, but, taken together, may raise suspicion concerning that
situation. The context, in which a situation arises, therefore, is a significant factor in assessing suspicion. This will vary from business to business
and from one customer to another.
The Centre has issued a Guidance note on suspicious and unusual transactions reporting which was published on Government Gazette no 30873 on the 14 March
2008 and can also be found on the Centre’s official website.
Section 29 of the FIC Act imposes obligation on any person who carries on a business or is in charge of or manages a business or who is employed by a
business to report suspicious or unusual transactions to the Centre. It provides that required reporters must report if suspect that:
Regulation 22 of the Money Laundering Control Regulations made under the FIC Act stipulates the manner in which a report should be made to the Centre. In terms of the Regulation a report must be made by means of the internet-based reporting available on the Centre’s website at www.fic.gov.za. In exceptional cases where a person does not have the technical capability to make a report electronically that person may send it by facsimile to the Centre on (012) 641 6438 or Post to Private Bag x 177, Centurion 0046.