Stricter Fica rules mooted for vehicle and krugerrand dealers
These dealers would have to conduct customer due diligence if the amendments are adopted
Stricter obligations on motor vehicle and krugerrands dealers have been proposed under amendments to the Financial Intelligence Centre Act (Fica).
The act governs the Financial Intelligence Centre (FIC) that was created to monitor financial transactions of specified businesses at risk of being exploited by criminals in a bid to limit money-laundering and the financing of terrorism.
Under the act, designated businesses are required to report on cash transactions of more than R25,000 as cash is often used to launder money derived from criminal activities. Stricter obligations are placed on sectors in which the risk is higher.
In terms of the proposed amendments, the obligations on vehicle and krugerrands dealers to simply register with the FIC and report on transactions will become more onerous. They would be categorised as accountable institutions and would have to identify and verify clients, retain client and transactional records, and undertake other forms of customer due diligence.
“The National Treasury and the FIC believe that the inclusion of the proposed new categories of business as accountable institutions within the framework against money-laundering and terrorist financing will add significant value to the work of the FIC and strengthen its ability to support investigating and prosecuting authorities with quality financial intelligence information,” the Treasury said in a statement on Tuesday.
In terms of the proposed amendments, the FIC will also take over the responsibility of overseeing and enforcing compliance with Fica in respect of the non-financial sector activities involving estate agents, gambling institutions, trust and company service providers, and legal practitioners.
“The low level of compliance within these and other non-financial sectors, along with the absence of robust supervisory powers for enforcement to address non-compliance with Fica, has previously been identified as a weakness,” the Treasury said.
“The non-financial supervisory bodies will not be expected to play a primary role in supervising and enforcing compliance with Fica, but instead play a supportive role, as they lack the resources that the FIC has to play this role.”
The proposed amendments have been published for public comment.