Internal Rules: FICA

Transcription

1 Internal Rules FICA

2 Internal Rules: FICA 2 V1 f 2017 INTRODUCTION Mney laundering is a term used t describe a number f techniques; prcedures r prcesses in which funds btained thrugh illegal, unlawful r criminal activities are cnverted int assets in such a way s as t cnceal their true rigin, wnership r any ther factrs that may indicate an irregularity. The main bjective f mney laundering is t legitimize incme riginating frm these surces. The Financial Intelligence Centre Act, prmulgated in 2001 in Suth Africa, sets up anti-mney laundering prcedures t prevent criminal grups and individuals frm cnverting illegal prfits int clean mney. FICA requires all individuals and institutins t reprt specified as well as unusual r suspicius transactins t the Financial Intelligence Centre. The purpse f this Internal Plicy and Prcedures is t ensure cmpliance with FICA and t ensure that each emplyee knws its rle in cmplying with the requirements as impsed by FICA. All emplyees f the cmpany listed abve are required t cmply with the prvisins f the Act and this manual sets ut hw t cmply. CUSTOMER ACCEPTANCE POLICY FSPs are expected t develp clear custmer acceptance and prcedures, including a descriptin f the type f custmer that is likely t pse a higher than average risk t their business. This risk is the risk f POTENTIAL MONEY LAUNDERING ACTIVITIES. The FSP takes int accunt risk indicatrs, including factrs such as the client s: Backgrund; Cuntry f rigin; Public r high prfile psitin; (PEP s) Linked accunts and; Business activities It is the plicy f the FSP t accept the fllwing clients as lw risk clients: Lcal clients Clients transferring mnies using EFT and nt cash depsits Existing clients with whm a relatinship is already established Clients whereby a relatinship is established, and nt just a single transactin Receipts in the amunt f R r less. THE RISK RATE DOCUMENT MUST BE COMPLETED AND ADDED TO EVERY CLIENT S FILE, WHERE THERE IS A CASH TRANSACTION.

3 3 Clients nt falling int ne f the abve categries are regarded as high risk. Extensive due diligence fr higher risk clients is required. This includes the cmpletin f the risk rate dcument (ANNEXURE A) and btaining infrmatin and verifying the surce f incme f the client, tgether with the surce f funds. DEFINITIONS When using this manual yu will cme acrss sme terminlgy and this sectin sets ut the meaning f the terminlgy. "Accuntable institutin means all businesses r persns as listed in Schedule 1 t the Act and includes (but is nt restricted t), all listed cmpanies, all estate agents, all insurance cmpanies, all insurance intermediaries and all unit trust management cmpanies. All these afrementined entities have certain bligatins in terms f the Act and these are set ut in this manual. "Business relatinship" as ppsed t a nce-ff transactin means a cntinuing arrangement between tw r mre parties at least ne f whm is acting in the curse and scpe f business (typically the institutin and a custmer r client) where transactins are facilitated between the parties n a regular r habitual basis. "Cash / cash transactin" this includes nt nly physical cash paid r received but als any traveller's cheques. Cash, as defined in the FIC Act, des nt include negtiable instruments, transfer f funds by means f bank cheque, bank draft, electrnic funds transfer, wire transfer r ther written rder that des nt invlve the physical transfer f cash. These methds f transferring funds will nt be cvered by the CTR bligatin under sectin 28 f the FIC Act. Client means a Prspective plicyhlder; Plicyhlder; Plicy wner; Premium payer; Investr; Cessinary (nly if the cessinary is nt a knwn bank). Beneficiary (nly at claims stage, maturity, pay-ut t the beneficiary) Silent r annymus partner; The ther persn n whse behalf a client is acting Anther persn acting n behalf f a client. CTR means the cash threshld reprt that must be submitted in terms f sectin 28 f the FIC Act. FICA means the Financial Intelligence Centre Act. "FIC" means the Financial Intelligence Centre, the gvernment authrity wh ensures cmpliance with the Act. KYC prcedures means Knw Yur Client prcedures in respect f identificatin and verificatin f identities f clients. Sectin 43(b) FICA Cmpliance Officer means the dedicated persn appinted by the FSP with the respnsibility t ensure cmpliance by the emplyees f the accuntable institutin with FICA as well as the rules prvided fr within this dcument.

4 4 Single transactin means a transactin ther than a transactin cncluded in the curse f a business relatinship. "Transactin a nce-ff transactin carried ut ther than in the nrmal curse f business fr ne f the parties (see business relatinship definitin). THE RULES All accuntable institutins must btain and verify certain infrmatin, maintain recrds f the relatinship r transactin with that client, reprt cash transactins (received and paid) abve a certain threshld and reprt suspicius r unusual transactins, when either establishing a business relatinship r cncluding a single transactin with a client. This means that any business entity must fllw the prcedure set ut belw when dealing with a new client r business partner. A transactin may nt be cncluded withut the infrmatin required being supplied by the client r business partner. All verificatin must be dne n a face t face basis that is the client must be physically met and identified. If faxed/ mailed cpies f dcumentatin is received, withut meeting the client n a face t face basis, all received dcuments must already have been certified. ESTABLISHMENT AND VERIFICATION OF IDENTITIES OF PARTIES TO A BUSINESS RELATIONSHIP (Sectin 21, Regulatins 2-19) IDENTIFYING THE CLIENT AND VERIFYING THE INFORMATION All client infrmatin required must be btained frm the client in a diligent and accurate manner. The infrmatin is btained t ensure that the prvider knws its client (KYC - knw yur client), t ensure the prvider knws wh it is dealing with. Each dcument btained is t reflect the name f the verifier, the date, and what the surce dcument was. Any faxed dcuments received shuld nly be accepted if the fax was certified prir t its being sent. Each emplyee must reprt transactins cncluded by him/her t the reprting fficers where the necessary infrmatin was nt btainable frm the client r where the client refused t disclse r submit the infrmatin required. Where the business partner is the fllwing type f entity, this step need nt be fllwed unless the transactin is a suspicius r unusual transactin: Where the party t be transacted with is cmpany listed n the JSE; Legal persn and nn-cntrlled client in respect f the JSE Rules. Where the business partner des nt fulfil the abve exemptin, the fllwing infrmatin must be btained:

5 NATURAL PERSONS 5 Full names and I.D. number tgether with cpy f identity dcument (where the riginal is seen) r cpy f a valid driver s licence (nly where the I.D. dcument is nt available, a reasn fr n I.D. dcument must be supplied). Certified cpies are accepted where the representative has nt seen the riginal. The client r business partner must be physically identified and met; Residential address which must be substantiated by e.g. ne f the fllwing which must reflect the address, and a cpy f the dcument must be kept: A utility bill (less than 3 mnths ld) A bank statement (less than 3 mnths ld) A recent lease agreement (less than 3 mnths ld) A rates and taxes accunt (less than 3 mnths ld) A Telkm telephne accunt (less than 3 mnths ld) A mrtgage statement (less than 3 mnths ld) Recent SARS return / IRP5 A recent insurance plicy dcument Payslip r salary advice Valid TV licence dcument Recent mtr vehicle licence dcument Affidavit cnfirming prf f residence NATURAL PERSONS UNDER LEGAL INCAPACITY E.G. MINORS/ PERSONS UNDER CURATORSHIP The infrmatin must be btained fr bth the incapacitated persn and the persn assisting. CLOSE CORPORATIONS AND COMPANIES COMPANY: The registered name and registratin number and registered address f the entity tgether with a certified cpy f the Certificate f Incrpratin (cmpany frm CM1 r COR15.1A/COR15.1B), Ntice f Registered Office and pstal address (frm CM22 r COR21). The frms must bear the stamp f the Registrar f Cmpanies. CLOSE CORPORATION: Fr a Clse Crpratin, certified cpies f the Funding Statement, Certificate f Incrpratin (CK1 r CM1/COR15.1A/COR15.1B), Amended Funding Statement (CK2 r CM2/COR15.1A/15.1B) if applicable, all duly stamped are required; BOTH COMPANY AND CLOSE CORPORATION: The trade name f the business (if applicable) and prf f the trade name. Prf may be in a frm as per clause abve; The physical address f the business. Where the business has multiple addresses frm which it perates, the head ffice address and the relevant branch ffice address are required; Fr a cmpany, the fllwing additinal requirements must be met: The full names, date f birth and residential address and cntact particulars f the manager f the cmpany and each natural persn authrised t transact n behalf f the ther cmpany; and

6 6 The full names, I.D. number and date f birth r registered name, registratin number, registered address, trade name and business address f all persns/entities hlding 25% r mre f the rating rights f the cmpany cncerned; The manager r a directr must be physically met and identified. Fr a clse crpratin the infrmatin (NATURAL PERSONS) fr each member and each persn t be authrised t transact is required; The infrmatin required is t be verified The Incme Tax number and VAT number f the Clse Crpratin and cmpany and certified cpy f a SARS dcument. PARTNERSHIPS Requirements as per natural persns must be btained fr each partner; The ID and address details fr every manager and persn establishing the relatinship n behalf f the partnership; The business name f the partnership and business address f the partnership and prf theref; TRUSTS The name, trust number and a certified cpy f the trust deed; The address f the Master f the High Curt where the trust is registered; The Incme Tax number f the trust and a certified cpy f the SARS dcument evidencing this; The full names, date f birth, identity number, residential address and cntact particulars f each natural persn wh is a trustee, beneficiary and wh acts n behalf f the trust and prf theref Certified cpies f the Letter f Appintment f all trustees; Particulars f hw the beneficiaries f the trust are determined. WHERE A PERSON ACTS ON THE AUTHORITY OF ANOTHER All the details f that authrised persn are required in additin t the infrmatin f the persn n whse behalf they are acting; A certified cpy f a Pwer f Attrney r Reslutin r Curt Order. FOREIGN ENTITIES Natural Persns Full identificatin must be btained in respect f any natural persn wh is nt a citizen f the Republic. Legal Persns The particulars referred t fr legal persns are t be btained. In additin, the cuntry f incrpratin must be established and verified.

7 7 Where the Cmpany relies n the Par 4, Part 1 f the FICA regulatins, and exemptin is granted under Sectins 21 and 22 f the Act, written cnfirmatin f FICA cmpliance by the third party is t accmpany every applicatin submitted, where applicable. The standard frmat, as annexed heret, will be deemed t be sufficient evidence f such. POLITICALLY EXPOSED PERSONS (PEP S) A plitically expsed persn r PEP is the term used fr an individual wh is r has in the past been entrusted with prminent public functins in a particular cuntry. The fllwing examples serve as aids in defining PEPs: Heads f State, Heads f Gvernment and cabinet ministers; Influential functinaries in natinalised industries and gvernment administratin; Senir judges; Senir plitical party functinaries; Senir and/r influential fficials, functinaries and military leaders and peple with similar functins in internatinal r supranatinal rganisatins; Members f ruling r ryal families; Senir and/r influential representatives f religius rganisatins (if these functins are cnnected t plitical, judicial, military r administrative respnsibilities). Families and clsely assciated persns f PEPs shuld als be given special attentin by an institutin. The term "families" includes clse family members such as spuses, children, parents and siblings and may als include ther bld relatives and relatives by marriage. The categry f "clsely assciated persns" includes clse business clleagues and persnal advisers/cnsultants t the PEP as well as persns, wh bviusly benefit significantly frm being clse t such a persn. An institutin shuld cnduct prper due diligence n bth a PEP and the persns acting n his r her behalf. Similarly, KYC principles shuld be applied withut exceptin t PEPs, families f PEPs and clsely assciated persns t the PEP. This entails btaining, in additin t the required FICA identificatin and verificatin, infrmatin and verificatin f: SOURCE OF INCOME AND SOURCE OF FUNDS. TREATMENT OF PEPS IN RELATION TO OTHER HIGH-RISK CLIENTS Specific actin shuld be taken in relatin t PEPs as a categry f high-risk client. In additin t perfrming custmer due diligence measures, institutins shuld put in place apprpriate risk management systems t determine whether a custmer, a ptential custmer r the beneficial wner is a PEP. All clients shuld be asked whether they wuld fall int ne f the categries abve, r cnstitute family f any such persns. In additin the fllwing is required: Obtain senir management apprval fr establishing business relatinships with a PEP. When the client has been accepted, the institutin shuld be required t btain senir management apprval t cntinue the business relatinship; Take reasnable measures t establish the surce f wealth and the surce f funds f custmers and the beneficial wners identified as PEPs; Cnduct enhanced nging mnitring f a relatinship with a PEP.

8 POLICIES FOR DEALING WITH PEPS: 8 PEPs shuld be regarded as high-risk clients and, as a result, enhanced due diligence shuld be perfrmed n this categry f client. Heightened scrutiny has t be applied whenever PEPs r families f PEPs r clsely assciated persns f the PEP are the cntracting parties r the beneficial wners f the assets cncerned, r have pwer f dispsal ver assets by virtue f a pwer f attrney r signature authrisatin. The risk rate dcument t be cmpleted at every transactin includes questins in respect f PEP. This must be cmpleted and placed n file fr every cash transactin. VERIFYING INFORMATION WHENEVER THE CLIENT IS NOT PRESENT The verificatin prcess need nt take place in persn, prvided reasnable steps are taken t ensure the crrectness f any verificatin prcess. Whenever the FSP, btains infrmatin abut a natural persn, legal entity, partnership r trust in the absence f persnal cntact with that natural persn r representative f the legal entity r trust, reasnable steps must be taken in rder t establish the existence and t verify the identity f such natural persn, partnership, legal entity r trust. If the abve relates t a natural persn, the fllwing guidelines shuld be adhered t: Obtain the usual cpies f the prescribed dcumentatin in rder t establish the identity f a natural persn, partnership, legal persn r trust, as prvided fr in these rules. Whenever the abve-mentined infrmatin relates t a natural persn, such persn s names, date f birth and identity number, can be verified with reference t the infrmatin maintained by a recgnised credit bureau r n the fficial vter s rll. Such natural persn s residential address culd be verified with reference t a lcal r natinal telephne directry. Such natural persn s identity can be btained by making telephnic cntact at the telephne number btained in the lcal r natinal telephne directry as abve, and cnfirming whether he r she is the persn seeking t establish a business relatinship r execute a transactin. Such natural persn s name and identity culd be verified by btaining a cancelled cheque frm him r her and cnfirming the details with the bank invlved. Such natural persn s residential address culd be verified by visiting the address. A standard declaratin cnfirming the client s details shuld in such event be cmpleted, dated and signed by the visitr. Such natural persn s names, date f birth, identity number r residential address culd be btained thrugh an apprpriate reference frm the persn s bank and/r emplyer If the abve relates t a legal persn, partnership r trust, the fllwing guidelines shuld be adhered t: A cmpany r clse crpratin s registered name, trade name, registratin number and business address culd be cnfirmed with reference t the details maintained by a recgnised credit bureau A cmpany r clse crpratins abve mentined details r part theref culd be cnfirmed with reference t a lcal r natinal directry r ther business directry r publicatin. A cmpany r clse crpratin s identity culd be btained by cntacting the entity at the telephne number btained frm a telephne directry r business publicatin as abve and cnfirming that the cmpany r clse crpratin is the entity seeking t establish a business relatinship r execute a transactin. A legal persn, partnership r trust s identity culd be verified by btaining a cancelled cheque and cnfirming the details with the bank invlved.

9 9 A legal persn, partnership r trust s business address culd be verified by visiting the address. A standard declaratin cnfirming the client s details shuld be cmpleted, dated and signed by the visitr. A legal persn, partnership r trust s registered r trade name, registratin number and business address culd be btained thrugh an apprpriate reference frm the entity s bank r the Cmpanies and Intellectual Prperty Registratin Officer (CIPRO). RECORD KEEPING (Sectins 22-26, Regulatin 20) Recrd keeping All dcuments and recrds relating t each client ( client infrmatin ), with whm a transactin was cncluded must be maintained and kept in safe custdy (prtected against destructin) fr a perid f 5 years FROM DATE OF CONCLUSION OF THE TRANSACTION OR DATE THE RELATIONSHIP WITH THE CLIENT WAS TERMINATED, WHICHEVER OCCURS THE LATEST IN TIME. In this regard all client infrmatin must be handed t the mney laundering cntrl fficer, wh can thereafter be cntacted t ensure access t client infrmatin by emplyees. This includes identificatin f the client, prf f address and mst imprtantly surce and rigin f funds. Such dcumentatin must be submitted tgether with applicatin frms r any ther agreement. Hard cpies f the dcumentatin may be held in a client file r it may be held electrnically Each emplyee wh remves client infrmatin frm safekeeping, must sign fr such client infrmatin and insert the date such client infrmatin is remved frm safekeeping. On return f such client infrmatin the same persn wh remved such infrmatin must sign and date that all client infrmatin was returned. Recrds are t be kept f everything that was dne with the client r business partner. This means that all cpies f dcumentatin, including but nt limited t, letters, applicatin frms, qutes, receipts, s as well as the further details mentined in this sectin are t be kept. All recrds are t be kept fr 5 years after the date f the last transactin. All recrds must be updated within 3 days f receiving a change f details. All changes f detail must be accmpanied by prf All parties t a business relatinship must cnfirm, in writing, all their details nce every tw years. (FICA verificatin prcess) A recrd f all transactins with that party must be kept. The name f the emplyee dealing with the party must be recrded as well as the name f the persn btaining and verifying the infrmatin required must be kept. This shuld be included n the cpies f verificatin dcuments The nature f the relatinship r transactin must be recrded and kept. The amunt invlved must be recrded and a recrd kept. UPDATED DETAILS: ALL EXISTING/ REPEAT CLIENTS ARE TO BE RE-VERIFIED AT LEAST ONCE EVERY 24 MONTHS FULL RECORDS OF THIS PROCESS ARE TO BE KEPT

10 ORIGIN OF THE FUNDS (Regulatin 21) 10 Prf f the rigin f funds is required fr purpses f building a client prfile where a persn is a PEP, r pses a high risk f facilitating mney laundering activities r t enable the Cmpany t identify any pssible mney laundering and infrmatin. The fllwing dcumentatin is required: Origin f funds i.e. surce f the ther party s incme, fr example: Salary A dnatin An inheritance Prf f the rigin f funds. Any substantiating dcumentatin such as: A cpy f a will Investment maturity letter Balance sheet Incme statement The surce f the funds which the ther party intends t use in the curse f the relatinship: Incme statement Balance sheet Bank statement REPORTING REPORTING IN TERMS OF FICA WITHIN 1 DAY: Each emplyee must immediately reprt a transactin t the reprting fficer Mney Laundering Cntrl fficer (MLCO) in the fllwing events: Any cash transactin ver the published threshld R (even if the transactin was split int tw r mre, and the ttal exceeds this amunt) Any unusual r suspicius transactin; r When it was impssible fr the emplyee t cmply with the requirements in terms f FICA fr Whatever reasn; r Whenever in dubt as t whether t reprt t the reprting fficer r nt. Where any funds are suspected f being used fr the financing f terrrist r related activities The respnsibility t reprt a transactin in terms f FICA t the Financial Intelligence Centre will transfer frm the emplyee t the reprting fficer after a transactin was reprted t the reprting fficer. The reprting fficer will determine and decide as t whether a transactin must be reprted. THRESHOLD AND CASH REPORTING (Sectin 28) WITHIN 2 DAYS: Physical cash payments in excess f the threshld amunt received have t be reprted. (R24 999) Where an accuntable institutin pays a client physical cash in excess f the threshld amunt this must be reprted.

11 11 WHERE CASH IS PAID INTO THE BANK ACCOUNT OF THE BUSINESS, THERE IS A DUTY ON THE BANK AS WELL AS THE INSTITUTION TO REPORT SUCH TRANSACTION TO THE CENTRE UNDER SECTION 28 OF THE FIC ACT. Where freign currency frms part f a cash transactin that requires the cmpletin f a cash transactin reprt (CTR), the advisr/brker must apply the exchange rate in effect fr the business day f the transactin t calculate the amunt in ZAR. Nte that aggregatin is applied t the threshld amunt. The threshld amunt can be a single cash transactin t the value f R r an aggregatin, where multiples f smaller amunts wuld add t the threshld amunt f R The calculatin f aggregated transactins is directinal, i.e. either an inward r utward directin f cash, but nt a cmbinatin f the tw. It is either withdrawals (payments) r depsits (receipts).a reprt in terms f sectin 28 f the Financial Intelligence Centre Act, Act 38 f 2001, (the FIC Act) must be sent t the Centre as sn as pssible but n later than 2 business days after the entity becmes aware that a cash transactin exceeds the prescribed limit, in terms f Regulatin 24(4) f the Mney Laundering and Terrrist Financing Cntrl Regulatins, 2002, as amended (the Regulatins), which came int peratin n 01 December 2010 REPORTING TO THE RELEVANT PERSON (MLCO) IS TO BE DONE WITHIN 1 DAY OF RECEIPT OF THE INFORMATION. ALL CASH TRANSACTIONS, THAT IS CASH PAID OR RECEIVED, ARE TO BE REPORTED TO THE MLCO. ALL REPORTING IS TO REMAIN CONFIDENTIAL. PROCESS: A full written reprt is t be frwarded t the MLCO within the specified time perids. (ANNEXURE B) The MLCO will ascertain whether reprting t the FIC is required. SUSPICIOUS OR UNUSUAL TRANSACTIONS (Sectin 29) All suspicius and/r unusual transactins are t be reprted IRRESPECTIVE OF THE SIZE OF THE TRANSACTION; Reprting t the MLCO is t be dne within 1 day f the receipt f the infrmatin; The fllwing nn-exhaustive list will give rise t a duty t reprt the transactin as suspicius r unusual: Where the persn knws r suspects that the Cmpany is abut t r has received the prceeds f any unlawful activity. Where the mney is received fr n apparent business r lawful purpse. Where the business is cnducted in a manner s as t avid a reprting duty in terms f these rules. Where the funds received may be as a result f any tax evasin r attempted evasin. An applicatin fr business utside the client's nrmal pattern f business. A delay in the prvisin f infrmatin t enable verificatin t be cmpleted. Any transactin that is unnecessarily cmplex. Any transactin invlving an undisclsed party. Early terminatin f a prduct, especially at a lss r where cash was tendered r the refund cheque is t a third party. A transfer f a benefit f a prduct t a third party. Attempts t use a third party cheque t make payment.

12 12 An applicant fr business shws n cncern fr the perfrmance f a prduct but much cncern fr the cancellatin / refund f the prduct. The client attempt t use cash in a transactin where the client has typically used cheques r ther methds f payment. The applicant requests t make payment with freign currency r by wire transfer frm anther cuntry. The client prvides fictitius infrmatin. The client purchases prducts beynd his apparent means. The client purchases a large plicy / prduct and within a shrt time cancels / repurchases and requests the cash value returned in cash r payable t a third party. The client uses a mailing address in anther jurisdictin and the telephne has been discnnected when phned fr verificatin. Any emplyees, agents r brkers wh suddenly shw a lavish lifestyle; an unexpected and dramatic increase sales; exceed a high level f single premium business r use their wn business address as the delivery address fr a client's dcumentatin. When reprting the transactin t the MLCO the fllwing infrmatin is t accmpany the reprt: The REASON fr the suspicin that the transactin is suspicius r unusual; Full client particulars; ANNEXURE B REPORTING TO THE MONEY LAUNDERING CONTROL OFFICER IS TO TAKE PLACE WITHIN 1 WORKING DAY OF THE TRANSACTION PROTECTION OF PERSON WHO REFERRED THE TRANSACTION The FSP and its emplyees cannt rely n a duty f secrecy r cnfidentiality and/r restrictin t disclse infrmatin (derived frm cmmn law, legislatin, agreement) as a defense against nn-cmpliance with the reprting requirements as required by the FIC Act, Hwever, the FSP and its emplyees can rely n the cmmn law right t legal prfessinal privilege between attrney and attrney's client cncerning cmmunicatins made in cnfidence between: The attrney and his/her client fr the purpse f legal advice / litigatin which is pending / cntemplated / has cmmenced; A third party and the attrney fr the purpse f litigatin which is pending / cntemplated / has cmmenced. AND The FSP, its emplyees r any ther persn acting n behalf f the FSP, cannt be sued r held criminally liable fr cmplying in gd faith with the FIC Act. A persn wh played any part in a reprt made in terms f the FIC Act may give evidence in criminal prceedings arising frm the reprt, but cannt be frced t d s. Unless a persn testifies wh played a rle in making a mentined reprt, n evidence may be led abut the identity f such persn. Whenever a Key Individual, Representative r Supprt Staff member is in dubt whether a reprt shuld be made t the FIC, the matter shuld be referred t the Sectin 43(b) FICA Cmpliance Officer.

13 13 If ever a Key Individual, Representative r Supprt Staff member is subpenaed t testify based n a reprt made t the FIC and/r infrmatin prvided t the FIC, the matter shuld be referred t the Sectin 43(b) FICA Cmpliance Officer fr further advice cncerning his r her rights PROPERTY ASSOCIATED WITH TERRORISM In the event where an emplyee becmes aware f prperty f a client which can be assciated with terrrism and any related activities, such emplyee whether emplyed by a reprting institutin r an accuntable institutin, must reprt t the reprting fficer. The reprting fficer must reprt t the FIC WITHIN 5 DAYS It is a further requirement t risk rate each client in rder t establish which clients pse a higher risk assciated with the cmbating f mney laundering and financing f terrrism t the entity. REPORTING TO THE FIC All threshld transactins and all suspicius and unusual transactins are t be reprted in accrdance with the prcedure hereunder: The new prvisin in terms f the amendments t the FIC Act requires every accuntable institutin in terms f sec. 43B t register with the Centre as per Annexure F and appint a sectin 43(b) FICA Cmpliance Officer as per Annexures C & D ; A registered accuntable institutin must ntify the Centre, in writing, f any changes t the particulars furnished within 90 days after such change. Once registered Accuntable Institutins and reprting institutins are required t use the new Suspicius Transactin Reprt (STR) and Terrrist Prperty Reprt (TPR) frms, available n the FIC website, when filing these reprts t the Centre REGISTRATION: Yu can register by fllwing the steps belw: click n ACQUIRE LOGIN CREDENTIALS under REPORTS & REQUESTS cmplete yur details in the fields prvided Sec. 61A is inserted int the principal Act and determines that any accuntable institutin that fails t register with the Centre in terms f sectin 43B, r fails t prvide infrmatin in terms f sectin 43B is guilty f an ffence. Sec. 68 f the principal Act is substituted by a new sectin 68 which determines that a persn cnvicted f an ffence mentined in sectin 61A is liable t: IMPRISONMENT FOR A PERIOD NOT EXCEEDING FIVE YEARS OR TO A FINE NOT EXCEEDING R10 MILLION. Each emplyee must immediately reprt a transactin t the reprting fficer in the fllwing events: ANY CASH TRANSACTION OVER THE PUBLISHED THRESHOLD; OR ANY UNUSUAL OR SUSPICIOUS TRANSACTION; OR WHEN IT WAS IMPOSSIBLE FOR THE EMPLOYEE TO COMPLY WITH THE REQUIREMENTS IN TERMS OF FICA FOR WHATEVER REASON; OR

14 14 PROPERTY OF A CLIENT WHICH CAN BE ASSOCIATED WITH TERRORISM AND ANY RELATED ACTIVITIES, WHENEVER IN DOUBT AS TO WHETHER TO REPORT TO THE REPORTING OFFICER OR NOT. The respnsibility t reprt a transactin in terms f FICA t the Financial Intelligence Centre will transfer frm the emplyee t the reprting fficer after a transactin was reprted t the reprting fficer. The reprting fficer will determine and decide as t whether a transactin must be reprted. REPORTING OFFICER The Cunter-Mney Laundering Cntrl and Reprting Officer fr the cmpany is a suitably respnsible persn, r any ther persn nminated frm time t time by the cmpany. Every MLCO shall cmplete the appintment frm which shall be placed n the cmpliance file as part f the general recrdkeeping. (ANNEXURES C & D) The mney laundering cntrl and reprting fficer (MLCO) fr the business is Rland Salmn. If the emplyee has any questins r any queries r is uncertain f any aspect relating t FICA, the emplyee must reprt t the MLCO reprting fficer immediately befre any transactin is finalised between the cmpany and a client in rder t ensure cmpliance with FICA. The reprting fficer has t determine whether r nt the transactin is reprtable t the Financial Intelligence Centre. Reprting perids: THRESHOLD TRANSACTION 2 DAYS TERRORIST RELATED ACTIVITITES 5 DAYS SUSPICIOUS OR UNUSUAL TRANSACTIONS 15 DAYS The MLCO will: Ensure cmpliance with applicable mney laundering legislatin by the FSP and all emplyees perating under the FSP; Ensure cmpliance by everyne in the business with the internal rules; Reprt suspicius and unusual transactins t the FIC; Reprt prperty assciated with terrrism and r related activities; Liaise with authrities n develpments in respect f applicable legislatin; Reprt t the FSP in regard t cmpliance by the FSP and persns perating under the FSP; Mnitr training f the FSP, key individuals, representatives and staff n applicable legislatin Submissin f On line reprts in terms f sec 28A f the FIC Act n the apprpriate dates THE ROLE OF THE SECTION 43(b) FICA COMPLIANCE OFFICER Whenever the Sectin 43(b) FICA Cmpliance Officer knws r suspects that a persn r transactin r attempted transactin reprted t him falls within any f the belw categries he r she must reprt the persn, transactin r attempted transactin t the FIC: The FSP has received r is abut t receive the prceeds f unlawful activities r prperty which is cnnected t an ffence relating t the financing f terrrist and related activities;

15 Any transactin r prspective transactin ver which a persn is making enquiries: 15 Facilitates, r will facilitate the prceeds f unlawful activities int the FSP; Facilitates, r will facilitate, r is likely t facilitate the transfer f prceeds f unlawful activities; Have, r will have n apparent business r lawful purpse; Are cncluded, r will be cncluded fr the purpse f aviding giving rise t a reprting duty under the FIC Act; Appears t be an evasin r attempted evasin f a duty t pay any tax r levy; Cause, r may cause the FSP t be used in any way fr mney laundering purpses; Relates t an ffence relating t the financing f terrrist and related activities. The Sectin 43(b) FICA Cmpliance Officer will reprt t the FIC as sn as pssible but n later than 5 days (excluding Saturdays, Sundays and public hlidays) frm the date n which the Sectin 43(b) FICA Cmpliance Officer became aware f, r suspected the ccurrence f a reprtable transactin. Such said reprt must be made by way f the FIC s internet-based reprting prtal ( and cmpleting the required infrmatin fields n the website. Any submissins made t the Sectin 43(b) FICA Cmpliance Officer must be recrded by the Sectin 42(b) FICA Cmpliance Officer and nt n the general database f the FSP. The Sectin 43(b) FICA Cmpliance Officer must have access t this database. Whenever a duly authrised representative f the FIC requests additinal infrmatin abut a reprted case, the Sectin 43(b) FICA Cmpliance Officer must prvide the required infrmatin. Whenever a duly authrised representative f the FIC requests that the transactin shuld be discntinued, the Sectin 43(b) FICA Cmpliance Officer must ensure that the FSP discntinues the transactin. Whenever the Sectin 43(b) FICA Cmpliance Officer believes it necessary t btain additinal infrmatin surrunding a client whm established a business relatinship r is abut t establish a business relatinship pses a high risk f facilitating mney laundering activities, OR The Sectin 43(b) FICA Cmpliance Officer believes additinal measures must be taken in rder t enable the FSP t identify the prceeds f pssible unlawful activities r mney laundering activities The Sectin 43(b) FICA Cmpliance Officer must btain sufficient apprpriate infrmatin t determine whether transactins invlving the client are cnsistent with the FSP s knwledge f that client and must include: The surce f that client s incme, and The surce f the funds which that persn expects t use in cncluding the cntract r transactin FIC REQUEST FOR ADDITIONAL INFORMATION Whenever an authrised representative f the FIC requires any infrmatin regarding a reprt made t it by the FSP, such request must be referred t the Sectin 43(b) FICA Cmpliance Officer fr attentin. Whenever a Key Individual, Representative r Supprt Staff member f the FSP wishes t request

16 16 infrmatin frm the FIC, the request must be cmmunicated t the Sectin 43(b) FICA Cmpliance Officer. An authrised representative f the FIC may request the FSP t divulge whether: A particular persn is a client, insured life, beneficiary, r brker / representative f the FSP, r Whether a particular persn / representative emplyed by the FSP is acting n behalf f, r has acted fr a specified persn Any request frm the FIC, must be referred t the Sectin 43(b) FICA Cmpliance Officer befre the end f business that day. The Sectin 43(b) FICA Cmpliance Officer will ensure that the persn requesting the infrmatin has been duly authrised by the FIC t make requests f that nature. The Sectin 43(b) FICA Cmpliance Officer must prvide the FIC representative with the infrmatin referred t abve, (anything mre requires a warrant t be prduced by the FIC Representative), and wuld require the FIC Representative t sign an acknwledgement f receipt. The Sectin 43(b) FICA Cmpliance Officer must recrd the request and arrange fr the scanning f the warrant, written authrity, acknwledgement f receipt nt the secure database held by the Sectin 43(b) FICA Cmpliance Officer. FIC INSPECTIONS Fr the purpses f determining cmpliance with the FIC Act and subrdinate legislatin an inspectr may at any reasnable time and n reasnable ntice, where apprpriate, enter and inspect any premises at which the FIC r, when acting in terms f Sectin 45(1), the supervisry bdy reasnably believes that the FSP is cnducting business. A duly authrised inspectr may: In writing direct a persn t appear fr questining befre the inspectr at a time and place determined by the inspectr Order any persn wh has r had any dcument in his, her r its pssessin r under his, her r its cntrl relating t the affairs f the FSP: T prduce that dcument, r T furnish the inspectr at the place and in the manner determined by the inspectr with infrmatin in respect f that dcument. Open any strngrm, safe r ther cntainer, r rder any persn t pen any strngrm, safe r ther cntainer, in which the inspectr suspects any dcument relevant t the inspectin is kept. Use any cmputer system r equipment n the premises r require reasnable assistance frm any persn n the premises t use that cmputer system t: Access any data cntained in r available t that cmputer system, and Reprduce any dcument frm that data Examine r make extracts frm r cpy any dcument in the pssessin f the FSP, against the issue f receipt Whenever, an inspectr undertakes an inspectin in terms f FICA any Key Individual r Sectin 43(b) FICA Cmpliance Officer must request frm the inspectr:

17 17 A certificate f appintment (that must be readily prduce such certificate immediately n request) A receipt f any dcument cpied, r remved frm the FSP s premises Whenever, an inspectr undertakes an inspectin in terms f FICA any Key Individual, Representative r Supprt Staff member must withut delay prvide reasnable assistance t an inspectr. PROCEDURE TO BE FOLLOWED: When a new business transactin is cncluded with a client and yu are an accuntable institutin and the transactin qualifies as a FICA transactin, the fllwing steps must be taken Step 1 Obtain verificatin dcuments Step 2 Cmplete the Risk rating/ PEP frm (ANNEXURE A) Only in the case f cash transactins Step 3 If in dubt abut any f the infrmatin required n any f the abve steps, reprt t the MLCO immediately and prvide cpies f the dcumentatin. Use the reprting frm (ANNEXURE B) WHEN A REPORT IS FILED A reprt in terms f sectin 28 f the Act must be sent t the Centre as sn as pssible but nt later than 2 days after becming aware f a cash transactin r series f cash transactins that has exceeded the prescribed Limit. When a reprt is filed, the fllwing steps must be fllwed. Step 1 G nt the FIC website and prvide yur lg-n details Step 2 Reprt the transactin The reprt must cntain the fllwing infrmatin: Full particulars in respect f the natural r legal persn making the reprt r ther entity n whse behalf the reprt is made. This will include: Identifying particulars f the persn r entity. Example ID r registratin number f entity; Address f the persn r entity; The type f business r ecnmic sectr f the accuntable institutin and reprting institutin; In the case f a natural persn, the persn's cntact particulars, and in the case f a legal persn r entity, the surname, initials and cntact particulars f a cntact persn. Step 3 In respect f the transactin fr which a reprt under sectin 28 is made, the reprt must cntain as much f the fllwing infrmatin as is available: The date and time f the transactin, r in the case f a series f transactins, the time f the transactins in the 24 hur perid; The descriptin f the transactin r series f transactins; The amunt f the funds per transactin r series f transactins; The currency in which the funds were dispsed f; and The purpse f the transactin r series f transactins;

18 18 Step 4 In respect f each persn cnducting the transactin the reprt must cntain as much f the fllwing infrmatin available- In the case f a natural persn, full particulars f the persn's name and surname, r initials and surname if the name is nt available; The date f birth f the persn r identificatin number; The type f identifying dcument frm which the particulars referred t subparagraphs abve were btained; In the case f a legal persn, full particulars f the persn's r entity's name including their registratin number; Nte that a reprt in terms f sectin 28 must cntain a full descriptin f the amunt f cash in excess f the prescribed limit which is received r paid ut by the accuntable institutin and reprting institutin Where a suspicius r unusual r ther transactin has been reprted, yu must cntinue with the transactin unless the MLCO r the FIC direct yu therwise. DO NOT ALERT YOUR CLIENT TO THE FACT THAT THEY ARE BEING REPORTED!!!! CONFIDENTIAL INFORMATION Any persn wh is required t make a reprt in terms f these rules may nt disclse the fact that a reprt is being made r the cntents f that reprt t any persn ther than the emplyee wh is respnsible fr making the reprt t the FIC. The client r ther business party may under n circumstances be infrmed that a reprt is t be made r that the client r business partner is suspected f mney laundering. N persn wh is aware that a reprt is t be made may disclse that fact r any infrmatin cntained in the reprt t any ther persn. Any persn wh suspects that a reprt is t be made r has been made in nt t disclse that fact. If yu make a reprt in gd faith, n criminal r civil actin may be taken against yu fr reprting. NON-COMPLIANCE WITH FICA DISCIPLINARY PROCEDURES Each member will be liable t disciplinary actin in the event f nn-cmpliance with FICA, the training manual, these Internal Plicy and Prcedures and all ther plicies issued frm time t time by the cmpany. A persn cnvicted under the Act will be summarily dismissed. Any cntraventin f the rules cntained in this manual will be dealt with in accrdance with the disciplinary prcedure.

19 OFFENCES AND PENALTIES 19 Any persn wh fails t reprt a suspicius r unusual transactin as referred t abve is guilty f an ffence in terms f sectins 52 r 53 f the Act. These ffences carry a maximum penalty f imprisnment fr a perid nt exceeding 15 years r a fine nt exceeding R100 millin (R ). It is an ffence t fail t identify a persn as prescribed in Sectin 21(1) f the act. It is an ffence t fail t keep recrd f infrmatin in terms f Sectin 22(1) and keep such recrds in terms f sectin 23 r 24(1) r t cmply with Sectin 24(3). It is an ffence t willfully tamper with a recrd in terms f sectin 22 r Sectin 24(1), r willfully destrys such a recrd, therwise in accrdance with Sectin 23. It is an ffence t fail t give assistance t the FIC in accrdance with Sectin 26(5) It is an ffence t fail t reprt cash transactins in accrdance with Sectin 28 It is an ffence t fail t reprt suspicius r unusual transactins in accrdance with Sectin 29(1) r (2) It is an ffence t fail t frmulate and implement internal rules in accrdance with Sectin 42(1) and (2). It is an ffence t fail t prvide training r t appint a Sectin 43(b) FICA Cmpliance Officer in accrdance with Sectin 43(a) and (b) A persn cnvicted f an ffence mentined abve, is liable t imprisnment fr a perid nt exceeding 15 years r t a fine nt exceeding R100 Millin (R ). DEFENSES Sectin 69 f FICA prvides fr a special defense t a charge based n the failure t reprt an unusual r suspicius transactin t the FIC: If an emplyee f the FSP is charged with cmmitting an ffence under sectin 52 f the Act that persn may raise as a defense the fact that he r she had: Cmplied with the applicable bligatin in terms f the Internal Rules relating t the reprting f infrmatin f the FSP. Reprted the matter t the Sectin 43(b) FICA Cmpliance Officer. Reprted the matter t his r her superir, if any, if the FSP did nt appint a Sectin 43(b) FICA Cmpliance Officer. The FSP had nt made its Internal Rules available t its emplyees. The Internal Rules were nt applicable t that persn.

20 Internal Rules: 20 T be read with the generic FICA Internal Rules Rule 1 The Cmpliance Officer is respnsible fr ensuring cmpliance with the Act and these internal rules. This will be exercised under the Generic FICA Internal Rules. Training and awareness Each emplyee is bliged t read thrugh the FICA training material and receive FICA training. Each emplyee must ensure that he/she fully understands the cntents, duties and bligatins in terms f FICA and knw hw t identify and reprt a suspicius transactin. After reading the FICA training manual and receiving FICA training each emplyee must sign and date a training register, which is t be kept n file and updated annually. All new staff t be trained n the prvisins f the Financial Intelligence Centre Act and the Cmpany s internal rules, within a perid f 30 days f jining the cmpany. Training will be cnducted every tw (2) years. Rule 2 Failing t cmply with the prvisins f the Act and these internal rules will result in disciplinary actin and criminal sanctin as set ut in the Generic FICA Internal Rules. Rule 3 If, in exceptinal circumstances, emplyees d establish a business relatinship r cnclude a single transactin with a client (r prspective client) and such transactin is nt FICA exempt, they must ensure that the crrect client identificatin, verificatin and recrd keeping prcedures are fllwed. The Generic FICA Internal Rules and the Mney Laundering cntrl Officer are t be cnsulted regarding the apprpriate prcedures, befre establishing a business relatinship r cncluding a single transactin with a client (r prspective client). Rule 4 Reprting cash transactins are nt the respnsibility f the business units [r the emplyees wrking in these business units] listed abve. The MLCO (mney laundering cntrl fficer) is respnsible fr all reprting Rule 5 Unusual r suspicius transactins Each emplyee is bliged t reprt any unusual r suspicius transactin t the reprting fficer. Unusual r suspicius transactins are transactins as set ut r any ther transactin cncluded by the emplyee and a client and the emplyee is nt sure whether he knws his client r is unsure f the surce f any f the received dcuments r mnies. Each transactin cncluded by an emplyee that seems unusual r suspicius, taking int cnsideratin the experience and qualificatins f each emplyee, must be reprted t the reprting fficer. Suspicius r unusual transactins are t be reprted within 1 wrking day f the suspicin arising. Reprting a suspicin wuld cnstitute a defence if charged with a cntraventin f the Act. Emplyees shuld therefre retain a cpy f the acknwledgement f receipt f the reprt by The FICA Reprting Officer fr a perid f five years. Emplyees may elect t remain annymus when reprting. Rule 6 The FICA Reprting Officer is bliged t acknwledge receipt f a reprt within 5 business days f the reprt being made. Receipt is t be acknwledged in writing utilising cnfidential mail services unless the

21 21 emplyee reprting elects t remain annymus and nt receive cnfirmatin. The FICA Reprting Officer is t keep recrds f the reprts submitted t the Financial Intelligence Centre. Rule 7 N persn making, r wh must make a reprt, may disclse the fact that a reprt has been made r the cntents f the reprt. The fact that a reprt has been made [r a suspicin that a reprt has been made], r the infrmatin cntained in the reprt may nt be disclsed t any ther persn, except as prvided fr in these rules and the Act. Rule 8 Any request fr infrmatin held by the Cmpany relating t the Act is t be referred t the MLCO, within 2 business days f receiving the request. Rule 9 Staff shuld cnsult with MLCO shuld they require further clarificatin f the internal rules r prvisins f the Act.

22 ANNEXURE A FICA RISK RATE DOCUMENT (GENERAL INSURANCE) 22 Client:.. Date: Verifier: The fllwing questins shuld be asked at each FICA transactin: Plitically Expsed persns (PEP s) Yes N Is the client ne f the fllwing r a clse family member r clsely assciated with ne f the fllwing? Heads f state, heads f Gvernment and cabinet ministers Influential functinaries in natinalised industries and Gvernment Senir judges Senir plitical party functinaries Senir and/r influential fficials, functinaries and military leaders and peple with similar functins in internatinal r supranatinal rganisatins Members f ruling r ryal families Senir and/r influential representatives f religius rganisatins (if these functins are cnnected t plitical, judicial, military r administrative respnsibilities) If any questins were answered Yes, the surce f funds and mre infrmatin abut the transactin and the client shuld be btained. Surce f funds:... verified:.. Surce f incme:...verified: Risk rating: The fllwing factrs shuld be taken int accunt when risk rating a client and shuld be implemented at each instance where FICA applies: 1 prduct type e.g. Cmplex investments culd be high risk and life cver with small savings culd be lw risk 2 business activity 3 client attributes, fr example, is the client n the United Natins list 4 duratin f client relatinship with FSP a nce ff transactin culd be high risk 5 surce f funds; is the surce f funds structured e.g. salary (lw risk) r cash business (high risk) 6 jurisdictin f client; lcal persn (lw ) and freign natinal (high) 7 transactin value; Value less than R (lw risk) 8 Type f entity. lw med high Manager s Signature Date

23 ANNEXURE B INTERNAL MONEY LAUNDERING REPORT FORM 23 Client Name:.. Client Ref N.. Client Address:... Reasns Why Yu Are Suspicius: (Please give full details) Transactin: Reprted by: Date: Once this frm is cmplete please take it (sealed) t the Mney Laundering Cntrl Officer (MLCO) and ensure yu receive a signed receipt. NB. REMEMBER DO NOT DISCUSS THE CONTENT OF THIS REPORT WITH ANYONE OTHER THAN THE MLCO RECEIPT: MONEY LAUNDERING REPORT RECEIVED BY:. ON./ /. FROM: SIGNED:.

24 ANNEXURE C 24 INTERNAL APPOINTMENT OF COUNTER-MONEY LAUNDERING OFFICER I, hereby accept my appintment as Cunter-mney Laundering Officer f. I agree that I will: a) Ensure cmpliance with mney laundering cntrl bligatins as set ut in the FIC Act, amendments theret as made frm time t time and the regulatin b) Accept and acknwledge reprts regarding reprtable transactins made by emplyees within tw wrking days. c) Examine the reprt in rder t establish that: There are sufficient grunds t classify the transactins as suspicius r unusual in terms f FICA There are sufficient grunds t believe that the prperty is assciated with terrrism r related actins Accmpanied by the relevant dcumentatin d) Make the reprt t the FIC centre nce verified and fund reprtable e) Deal with the reprt in cnfidence. f) Reprt all transactin abve the prescribed limit t the FIC Centre g) Attach a certified cpy f my Identity Dcument SIGNATURE DATE