Which Industries Remain Uncompliant?

Industries like financial services (including retail banking, insurance and payment companies) have for years been obligated to verify identities and conduct AML risk screening. 

However, there are many newly-regulated industries in South Africa that remain largely uncompliant with FICA. A lack of knowledge concerning FICA compliance means that they have not yet become compliant, or remain entirely unaware of their FICA compliance obligations. 

Some Uncompliant Industries 

As noted by the FIC, the following indutries maintain low levels of FICA compliance. 

• Legal Practitioners: 60%  

• Estate Agents: 66% 

• Trust Service Providers: 74%  

• Company Service Providers: 76%  

One newly regulated “industry” is that of High-Value Goods Dealers (HVGDs). According to the Financial Intelligence Centre (FIC), HVGDs include any business dealing in goods with a selling price of over R100,000. The FIC has listed HVGDs as Accountable Institutions due to the high risk of their assets being used by criminals to launder money.  

Examples of High-Value Goods Dealers: 

• Bicycle dealers 
• User motor vehicle dealers 
• Agricultural equipment dealers 
• Heavy equipment dealers
• Motorcycle dealers 

What are the FIC’s Requirements?

Many of these industries are classified as High-Value Goods Dealers (HVGDs).  In general, this means that they sell single items for R100,000 or more. In such an instance, the business selling the item must: 

• Verify the client’s ID number 
• Conduct AML Risk Screening (incl. checking for PEP/DPIP/FPPO status, screening for the individual’s presence on sanctions and watchlists, and checking for adverse media). 

These checks must be implemented in accordance with a company’s Risk Management and Compliance Programme (RMCP). 

What is an RMCP and RCR? 

An RMCP is a legal document that identifies the risks a business may encounter and outlines the strategies and measures implemented to mitigate those risks. For instance, if a business is at high risk of criminal activity, such as clients using false identities to launder money, it must adopt a risk assessment and identity verification system to ensure the legitimacy of its clients. These risks, along with the corresponding mitigation steps, are thoroughly detailed in the RMCP.

Creating an RMCP is a specialized task best handled by a law firm or professional with expertise in regulatory compliance. While free RMCP templates are available online, relying on them is not recommended, as many fail to meet the Financial Intelligence Centre's (FIC) audit standards. A failed audit can result in fines and other legal consequences.

Additionally, businesses are required to complete a Risk and Compliance Return (RCR), an online form provided by the FIC. By submitting the RCR, your company demonstrates awareness of money laundering risks and confirms adherence to the measures outlined in its RMCP.

The RCR can easily be filled out and submitted online via the FIC’s website here. 

FICA Compliance Solutions 

ThisIsMe is South Africa’s leading provider of digital tools for tasks like enhanced due diligence, KYC, customer due diligence, data validation and risk assessment. We provide a wide range of due diligence services that can help industries new to FICA easily ensure their regulatory compliance. 

To experience our full suite of advanced due diligence services, simply request a demo here.