FICA

Financial Intelligence Centre Act

The Financial Intelligence Centre in South Africa and Namibia have recently reviewed FICA legislation (anti-money laundering).

In Namibia this has resulted in the inclusion of accountants as Accountable Institutions. The South African FIC are considering similar amendments.

Duties of accountants in terms of the Namibian Financial Intelligence Centre Act, No. 13, 2012

In simple terms (please refer to Schedule 1 of the legislation for a comprehensive list) if you assist clients with one of the following activities, you have a reporting obligation to the FIC:

  • Buying or selling of real estate,
  • Managing money or bank accounts or similar,
  • Assist with creating, operating or managing legal persons,
  • Assist with setting up commercial arrangements,
  • Assist with buying or selling of business entities or legal rights,
  • Provide Trust or Company registration and administration services

How do you report 

The Namibian FIC issued a Guidance Note for legal practitioners on how to apply the FIC requirements. This guide, mutatis mutandis, are also useful for accountants.

Annexure A of the Guidance Note provides a template for verifying client identity and template for client records that must be kept by the accountant;

Annexure B the factors to consider in assessing the ML/TF risk a client poses;

Annexure C examples of common indicators that may point to a suspicious transaction

As an accountant you will also need to develop a set of policies and procedures to ensure that all staff members are aware of the firms obligations in terms of anti-money laundering (AML) initiatives.

A set of policies and procedures should include the following:

  • Overview of the background, governance structure and management of the business;
  • Commitment and approval of senior management to comply with the Act;
  • Description of the key internal rules, procedures, policies, etc. designed and implemented to ensure compliance with the Act;
  • Description of the key controls implemented to ensure that the above internal rules, procedures, policies are adhered to and that these are operating effectively; Details on AML training provided to staff; Brief overview on the ML risks faced by the firm as identified by the management, considering the client base, services or products offered by the firm and the location of the business;
  • Description of the independent review function implemented to provide management assurance that the key AML controls are working and that the entity complies with the FIA; and
  • Copies of the relevant documents supporting any of the above.

These policies and procedures would typically form part of the firms Quality Control manual in terms of ISQC 1 and NOCLAR. Accountants would typically perform the AML procedures as part of their working papers for Accepting the Engagement. A comprehensive list of working papers are available here. You will need to adapt these to also cover your anti-money laundering obligations.

Registering with the Namibian FIC

As an Accountable Institution you will have to register your firm online with the FIC. Click here to register your firm.

 

The responsibilities of accountable institutions in terms of FICA

As an Accountable Institution accountants will have the following responsibilities:

  • Identify and verify new and existing clients.
  • Keep records of identities of clients and transactions entered into with clients.

If the client acts on behalf of a third party, records of the identity of the third party as well as a copy of the mandate between the client and the third party shall be obtained and retained in instances of concluding a single transaction, concluding transactions as part of a business relationship or establishment of a business relationship.

The method of identification and verification of particulars:

  • The exact nature of the transaction or business relationship.
  • The parties to a transaction as well as the monetary value thereof.
  • The particulars of the employee or representative that obtained the information.
  • The information, documentation or forms furnished by the client to verify the information.

Responsibilities in addition, to keeping records:

  • No person shall destroy any record, except if the destruction of such record was authorised by the responsible person.
  • No person shall amend any record kept in terms of FICA.
  • Report certain large or suspicious transactions to the Financial Intelligence Centre established by FICA.
  • Formulate and implement internal rules consistent with FICA obligations.
  • Offer compulsory FICA training to employees.
  • Appoint a responsible person as a compliance officer to monitor compliance.

 

Resource
View a recent webinar on FICA requirements for accountants.