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Financial Intelligence Centre Act 1 of 2017

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The Financial Intelligence Centre Act, 38 of 2001 (FICA), came into effect on 1 July 2003. FICA was introduced to fight financial crime, such as money laundering, tax evasion, and terrorist financing activities. The FICA Amendment Act 1 of 2017 amends the existing Financial Intelligence Centre Act to strengthen South Africa's ability to fight illicit financial flows and other forms of financial crimes, which include money laundering, corruption, terrorism financing and tax evasion. FICA aims to ensure that financial / accountable institutions know with whom they are doing business. In terms of FICA, accountable institutions are required to preserve the paper trails of all transactions and are obliged to report any possible money laundering to the investigation authorities.

Although the FIC Act and the Regulations do not expressly make reference to a risk-based approach, these measures allow for a limited scope to apply a risk-based approach to the verification of certain client particulars. Guidance Note 1 indicates that application of a risk-based approach to the verification of the relevant particulars implies that an accountable institution can accurately assess the risk involved. It also implies that an accountable institution can take an informed decision on the basis of its risk assessment as to the appropriate methods and levels of verification that should be applied in a given circumstance. Guidance Note 1 further states that the assessment of these risk factors should best be done by means of a systematic approach to determine different risk classes and to identify criteria to characterise clients and products.


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