The FIC Amendment Act including the RMCP’s enforceable from 2 April 2019

Compli-Serve SA

The Financial Intelligence Centre Act (FICA), as amended, required that all Accountable Institutions (AIs) had to have a Risk Management and Compliance Programme (RMCP) in place by 2 April 2019. The requirement to implement an RMCP came into effect on 2 October 2017. Due to the nature of the RMCP, AIs were given until 2 April 2019 to fully adopt and implement an RMCP within their businesses.

The RMCP must contain procedures on how AIs will: Identify, Assess, Monitor, Mitigate, and Manage risks. A risk-based approach must be used by AIs when interacting with clients. This approach gives flexibility to AIs to decide what they consider to be high or low risk and how to manage these. The RMCP must also set out how the AI will conduct customer due diligence, maintain records, deal with reporting obligations, and how it will ensure ongoing training for all staff.

The following must be addressed by boards and management going forward:

All AML/CFT programmes that have not been reviewed or updated must be aligned with the current business practices;
AML/CFT risk assessments must be updated when changes in client or business risks occur;
Customer due diligence (CDD) must be consistent to the RMCP including enhanced and ongoing account monitoring.

Both the Financial Intelligence Centre (FIC) and the Financial Sector Conduct Authority (FSCA) will be visiting financial services providers in 2019 to ensure that their respective RMCP’s are in place and that FSPs are diligently adhering to the provisions therein.

Details of the FSCA’s future monitoring focus will include:

An increased focus on reviewing independent audit reports.
More in-depth reviews of client onboarding and account monitoring processes.
When undertaking operational reviews, it is with a great degree of certainty that the regulators will focus more on front-line staff who perform tasks such as client onboarding, to assess their understanding of the obligations.