Introduction to money laundering

What is money laundering?

What is terrorist financing?

What is Proliferation Financing?

What is the purpose of the Financial Intelligence Centre Act (FICA)

What is the role of the Financial Intelligence Centre (FIC)?

Offences

 Money laundering offence 

Offences subject to administrative penalties

Offences subject to a maximum of 15 years imprisonment or a fine not exceeding R100 million

Administrative sanctions

The Acts and Regulations

The Acts and Regulations

Definitions

Beneficial owner

Business relationship

Cash

Certified copy of a document

Domestic Prominent Influential Person (DPIP)

Foreign Politically Exposed Person (FPEP)

Identity Document

Knowledge

Money Laundering Reporting Officer (MLRO)

Proceeds of unlawful activities

Property

Property associated with terrorist and related activities.

Prescribed amount of a single transaction

Prospective client

Prominent Influential Person (PIP)

Single transaction

Unlawful activity

Registering with the Financial Intelligence Centre (FIC)

Method of registration

How to add goAML URL as a trusted site

How to enable pop-ups

Use of e mail addresses

Registration of the Compliance Officer

Registration of the firm

Step by step instructions on how to register

Centralisation of registration - delegation

Updating of details

Methods of receiving and responding to communications from the Centre

Failing to register with the FIC

Why is our firm an accountable institution?

Item 2 of schedule 1 of the FIC Act

Why are trusts being used for money laundering purposes?

What can our firm as a trust service provider do to combat money laundering?

Scope and purpose of the Risk Management and Compliance Hub (RMCH)

Purpose and objective of the Risk Management and Compliance Hub (RMCH))

Risk Management Compliance Governance

Responsibiliy of management and those charged with Governance

Approval and adoption of the Risk Management and Compliance Hub (RMCH)

Implementation of the Risk Management and Compliance Programme (RMCP)

Annual review of the Risk Management and Compliance Programme (RCMP)

Appointment and responsibility of the compliance / Reporting officer

Appointment of the Compliance/ Reporting Officer

Responsibilities of the Compliance officer

Advising the Centre of clients

Obligation to advise the Centre of clients of the firm

Implementing a Risk Based Approach (RBA)

Obligation to implement an effective Risk Management Compliance Program (RMCP)

Risk-rating methodology

Responding to identified risks

Control measures   

Customer due diligence

• Meaning of Customer Due Diligence (CDD)
• Timing of verification
• Activities considered to be a business relationship or single transaction
• Identification and verification of existing and prospective clients
• Verification and corroboration of the clients identity
• Understanding and obtaining information about the business relationship
• Anonymous clients and clients acting under false or fictitious names
• Money Laundering threats and vulnerabilities pased by international geographic areas
• Establish if a person is a Domestic Politically Exposed Person (DPEP)
• Establish if a person is a Foreign Politically Exposed Person (FPEP)
• Obtaining additional information from a client which poses a high risk of money laundering
• Establishing and verifying the identities of natural persons/ sole proprietor
• Assessing the risk of a natural person/ sole proprietor
• Establishing and verifying the identities of corporate entity
• Assessing the risk of corporate entity
• Establishing and verifying the identities of partnership
• Assessing the risk of a partnership
• Establishing and verifying the identities of a trust
• Assessing the risk of a trust
• Ongoing due diligence
• Doubts about veracity of previously obtained information
• Inability to conduct customer due diligence
• Maintaining the correctness of the clients information
• Impact of the protection of Personal Information Act. 2023 on the identification and verification requirements of the FIC Act

Record keeping

• Introduction
• Keeping of customer due diligence records
• Keeping records of transactions
• Duration for which records must be kept
• Recprds kept by third parties

Training relating to anti-money laundering and counter terrorist financing compliance

• Obligation to provide training to all employees
• Training plan for employees: Course outline
• Training session for partners and compliance reporting officers

Screening of employees

• Duty to screen employees

Targeted financial sanctions aimed at terrorist financing

Scrutinsing person`s and entities against the UN 1267 sanctions list

Scrutinizing persons and entities against the Targeted Financial Sanctions List (TFS)

Prohibitions relating to persons and entities identified by security Council of the United Nations

Applications for Permitted Financial services

Reporting cash transactions above R 49 999.99

Obligation to reporting cash transactions above R 49 999.99

Payment or receipt of cash via a third party

Prescribed particulars to be reported to the Centre

Reporting suspicious and unusual transactions

Obligation to report suspicious and unusual transactions

Meaning of suspicion

Types of reports

Indicators of suspicious and unusual transactions

Indicators of suspicious and unusual activity

Manner of reporting

Reporting suspicious and unusual transactions

Time period for submitting a report

Threshold for reporting  suspicious  and unusual transactions.

Prescribed particulars to be reported to the centre

Continuing with a transaction after a report is made to the FIC

Request by the Financial Intelligence Centre to discontinue the transaction

Dealing with further requests for information from the FIC

Reporting by temporary workers

Tipping-off

Confidentiality rules with regards to reporting to the Centre

Protection for person`s reporting to the centre

Reporting Failure

Defence

Failure to report suspicious or unusual transactions

Reporting of property associated with terrorist and related activities

Introduction

Obligation to report property associated with terrorist and related activities

Freezing of the property and ceasing to conduct business

Manner of reporting to the FIC

Intervention by Centre

Monitoring orders

Failure to file a report in terms if section 28A

Reporting fraud of theft under the Prevention and Combatting of Corrupt Activities Act (PRECCA)

Obligation to report

Making a report

Additional obligations for trustee of trust in terms of the Trust Property Control Act

FrRegistration on the Master`s Web Portal

Duty of a trustee of a trust

Master`s authorisation to act

Disclosure to accountable institutions

Recording of details of accountable institutions

Disclosure of beneficial ownership

Beneficial ownership in relation to a trust

Create, maintain and file the beneficial ownership register with the master of the high Court

Obtain an Engagement Letter and Power of Attorney from the client

Trust registration beneficial owners details on captured on SARS system

Requirements for dregistering a Trust

Failure by trustee to account or perform duties

Beneficial onership disclosures for trusts and companies Training Video

Frequently asked questions

Submission of Beneficial Ownership registers to CIPC

Requirement to submit an Annual Return

Definition of a beneficial owner in terms of the Companies Act

Holder of a beneficial interest in a company

Definition of an "Affected Company"

Filling requirements for companies that are not "Affected Companies"

Filling requirements of companies that are Affected Companies

Date when the information must be filed with the CIPC

Supporting documents that must be filed with the CIPC

Obtain an Engagement Letter and Power of Attorney from the client

Step by step instructions on how to capture beneficial ownership details on the CIPC Portal

Beneficial ownership disclosures - Clarification on uncertainties

Submission of a risk and compliance return to the Financial Intelligence Centre

Obligation to submit a Risk and Compliance return to the FIC

Procedures to be performed by the auditor during the audit of financial statements

Audit`s responsibility toward compliance with laws and regulations by the client during an audit

Acceptance or retention of audit clients

Identifying and assessing the risks of material misstatement

Consideration of fraud during the audit

Compliance with laws and regulations

Procedures where possible money laundering is discovered

Going Concern Considerations

Management representations

Finalising the engagement

The registered auditor`s report on financial statements

The duty to report a reportable irregularity in terms of the auditing profession act

Background

Section 45(1) prescribes as follows:

Policy

Procedures

Procedures to be performed by the independent reviewer during the independent review of financial statements.

Independent reviewers responsibility towards compliance with laws and regulations by the client during an independent review

Acceptance or retention of Independent Review clients

FICA training

FICA training for employees

FICA training for partners and compliance officers

Summary of the RMCP

Summary of the RMCP

From the Financial Intelligence Centre

Directives

• Directive 6