The Financial Intelligence Centre (FIC) held a roundtable on 2 February 2024 to reach out to stakeholders in the legal profession to get the message across to designated sectors to file outstanding risk and compliances returns with the FIC. Executive Manager for Compliance and Prevention at the FIC, Christopher Malan, said South Africa (SA) is in a difficult situation and the FIC is reaching out to stakeholders to get the message across and to turn the state of adherence around. This applies, in particular, to everybody who is not a bank, namely, to everybody who is not a financial services industry. He mentioned estate agencies and legal practitioners and casinos. He pointed out that SA was grey listed in February 2023 and the high-risk sectors are entities mentioned above.
Mr Malan said legal practitioners, estate agents and casinos, trust service providers and company service providers, have become the responsibility of the FIC. He pointed out that the FIC’s state of their compliance, gave the FIC a supervisor status over these sectors. He added that as the designated supervisor of these sectors and the profession, the FIC needs to implement and keep supervisory risk-assessments in terms of Directive 6 of 2023 (issued on 31 March 2023) updated. This is a tool to identify high risk designated non-financial businesses and professions as a basis for risk-based supervision. He said that is their action item A, if the FIC gets that right they will be able to identify the universe of such entities, which depending on their high-risk profile according to the supervision, from there on there will be an action plan.
Mr Malan added that based on high-risk entities, the FIC will be conducting inspections. However, he pointed out the organisation is unable to conduct inspections if estate agents and legal practitioners do not respond to the FIC. He said that the key to achieve inspections is to do a risk and compliance return. He noted that the FIC has held several webinars on this issue, saying that the risk compliance return is the risk assessment tool that the FIC requires to be completed and returned by legal practitioners and estate agencies. Adding that the risk compliance return is a questionnaire that is completed online.
Mr Malan pointed out that following the Financial Action Task Force grey listing SA, the idea is that SA must identify non-financial entities that are at a high risk of being abused of money laundering. He said that the risk and compliance tool has been accepted as the credible tool to use. However, Mr Malan said they are concerned about the low number of submissions by accountable entities listed in sch 1 of the Financial Intelligence Centre Act 38 of 2001.
Kgomotso Ramotsho Cert Journ (Boston) Cert Photography (Vega) is the news reporter at De Rebus.
