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FICA. Financial Intelligence Centre Act. Agenda. Functions of FICA Objectives of FICA What is a suspicious transaction ? How to report a suspicious transaction? Penalty for non-compliance. Global Overview. Rapid growth in organised crime and money laundering

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Presentation Transcript

  1. FICA Financial Intelligence Centre Act

  2. Agenda • Functions of FICA • Objectives of FICA • What is a suspicious transaction ? • How to report a suspicious transaction? • Penalty for non-compliance

  3. Global Overview • Rapid growth in organised crime and money laundering • Legislation dealing with these challenges: • Prevention of Organised Crime Act • Financial Intelligence Centre Act • Role Financial Action Task Force

  4. Objective of FICA • Complements Prevention of Organised Crime Act • Introduces measures aimed at preventing money laundering activities. • Financial Intelligence Centre • Money laundering Advisory Council • The regulatory regime encourages compliance and self-regulation by institutions

  5. Financial Intelligence Centre • Not an Investigative Body • FIC Functions: • Collect, Process, Analyse and Interpret Information obtained • Inform, Advise and Co-Operate with Investigating authorities • Supervise Compliance, and give guidance to institutions to combat money laundering activities.

  6. Money Laundering Advisory Council • Advisory Body to the Minister of Finance • Forum in which Gov and Private sector can consult on policies and measures to combat money laundering activities.

  7. Accountable Institutions • FICA provides a list of accountable institutions that may be exploited for money laundering purposes • Long-Term Insurers • Brokers • Attorneys • Banks

  8. Money Laundering v Fraud • Money Laundering is a process that hides the illicit nature or source of the funds. • Fraud aims at putting Charter Life at a disadvantage financially. • The aim of FICA is to trail the proceeds of organised crime

  9. Obligatory Duties • FICA came into force in February 2001 • Regulations of the Act were passed in December 2002, most of them are effective on 30th June 2003. • Duty to Report Suspicious or Unusual Transactions is effective from 3rd February 2003.

  10. Obligatory Duties • Duty to Identify and Verify new and existing Clients • Duty to Keep Records • Duty to Report • Duty to Train Staff • Maintain Internal rules

  11. Workshop: Objective • Proper understanding of Your reporting obligations regarding Suspicious or Unusual Transactions • Follow up sessions will be held on the remaining duties.

  12. What , When and How • What is a suspicious transaction ? • When does a person have knowledge of a suspicious transaction ? • When must a person report such a transaction ? • How must the transaction be reported ?

  13. What is a Suspicious Transactions ? • The receipt of the proceeds of an unlawful transaction • A transaction which: • facilitates the transfer of the proceeds of an unlawful transaction • there is no apparent business or lawful reason for the transaction • the purpose is to avoid the “reporting duty” under FICA • the transaction may be relevant to the investigation of an evasion of a tax duty

  14. When do you have knowledge ? • If you: • have actual knowledge of the fact; or • there is a reasonable possibility of the existence of that fact • and the person fails to obtain information to confirm or refute the existence of the fact

  15. What is the time frame in which the report must be made ? 15 days from the time the suspicion arouse

  16. How to test for reasonableness? • Test of a reasonable person • Would a reasonable person having, • general knowledge, skill, training and experience that a person in his position could reasonably be expected to have , or • general knowledge, skill, training and experience that the person in fact has.

  17. Examples • Large investment, given the profile of the client • Multiple policies – all cancelled within a 30-day cooling period • Third party payments during the 30-day cooling off period or of early surrenders

  18. Examples • Debit order details cancelled, and payments subsequently made through M65 cash deposits • Unemployed person using a third party’s bank account for large investments. • Incorrect debit order details, necessitating a refund

  19. Examples • Inactive bank accounts receiving policy benefits or refunds • Fraudulent ID documents

  20. Tipping Off • It is an offence to inform the suspect or any other person (including colleagues) other than in terms of Charter’s policy and Internal Rules that a report is to be submitted to the FIC

  21. How do you report the transaction ? • Staff members must report suspicious transactions on the FICA Register available on the Compliance web page • When in doubt escalate the matter to your team leader. • If you still need assistance then contact the Compliance Department : • Sid Kaplan • Anita Gopal

  22. FICA Register • Compliance Homepage • http://intranet.charterlife.co.za/ComplianceHomepage/FICARegister.html • Team Leaders have security to log a suspicion and view respective team members’ transactions

  23. Click on the new Compliance Home Page

  24. ·You are now on the Compliance Homepage. · Use the scroll bar on your right hand of the screen in order to see the link to the Register ·Click on the FICA Register to “Capture a Transaction”.

  25. Capture Transaction Policy Number Owner Name Life Insured Identity number or D.O.B. Issue Date (ddmmyyyy) Policy / Product Type Premium Payor Premium in Rands (R0.00) Premium amount in words Premium Frequency: Single/Annual/Monthly (Please enter either S or A or M)Transaction Date (ddmmyyyy) Value of policy @ the date of transaction Any Charter Life policy owned by the client ? If yes Policy number Cessionary Clients address or contact details Description of transaction including reasons why it may besuspicious or unusual and what drew your attention to this Your Name & Surname Your telephone number Your e-mail address

  26. What if the transaction is above board ? • If there is a reasonable explanation which puts to rest any suspicions, then these reasons must be recorded . • The record must be kept in the file and on AW . • The record is important as evidence in the event that FIC picks up a trend with other Accountable institutions on the same client and comes back to Charter Life for an explanation .

  27. Protection of Staff Members • Staff members reporting suspicious transactions are protected from civil or criminal proceedings • Internal rules must be easily accessible by all employees.

  28. Training • Charter Life is obliged to train employees to ensure: • compliance with FICA • compliance with Internal Rules • Collective duty of compliance on ALL employees of Charter Life

  29. Penalties • Range from 15 years imprisonment and or R10m fine • failure to report a suspicious transaction, • tipping off • 5 years imprisonment and or R1m fine • failure to submit a report, • draft internal rules or • failure to provide training

  30. Any Questions

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