We attended the FIC Roadshow 2023

With South Africa’s impending downgrade by the Financial Action Task Force (FATF) from a green country to a grey country, the Financial Intelligence Centre ( FIC) hosted an important online Roadshow on the 9th of February 2023.

This gathering was an attempt to educate and inform interested parties who may be affected by this potential downgrade and its consequences. It was especially important due to the possibility that the downgrade could occur as early as the 25th of February 2023.

It is imperative that companies read and understand the changes that are coming to the Financial Intelligence Centre Act (“FICA”), as these govern Anti-Money Laundering (AML) in South Africa, and will have a great impact on various organisations.

With the FIC proceeding to unpack even some unchanged sections of FICA, one can only conclude that the FIC felt it necessary to do so because they believed that many in attendance had not taken the time to familiarise themselves with the act, and needed a reminder of what it entailed. If this conclusion is true, the fact that the various compliance and risk enforcement divisions in attendance needed to be educated of even unchanged provisions speaks loudly as to why the country is facing a potential downgrade in the first place.

Looking at the various changes to FICA, these are the highlights;

1. An expansion of the types of Accountable Institutions in the FICA Schedule. This will now include entities such as retailers who deal in “high-value goods” and crypto asset service providers, or “casps”.
2. The deletion of the Reporting Institution Categories.
3. The inclusion of new reporting requirements and concepts such as “Electronic Funds Transfers” and related reporting.
4. A massive focus on FIC compliance from regulators to stave off a potentially devastating downgrade.
5. And finally Enhanced Client Due Diligence (CDD) measures which include an explicit expansion of the concept of Beneficial Ownership. Beneficial ownership will now include checks on Financial Service owners, aggressive warm-body checks and more.

For a more detailed review of all the changes made, please read our article on “Changes to AML and FICA Laws in South Africa for 2023”

One thing to ponder is that many people left the conference with a sense that the FIC was being fairly optimistic towards the possibility of South Africa not being downgraded from green to grey. One can only hope that they are privy to some knowledge coming from the FATF that the rest of us are unaware of.