Compliance with FICA for New Clients

Understanding FICA:

In today’s interconnected global economy, criminal enterprises can amass substantial illicit proceeds through fraud, narcotics trafficking, and arms smuggling.

These criminal entities consistently evolve their strategies to obfuscate the origins of their “unclean” money.

This not only imposes multibillion-dollar burdens on nations annually but also fuels the expansion of international terrorism.

Governments and international organisations have committed to deterring, forestalling, and prosecuting money laundering activities to counteract these threats.

Accountable entities, including MVA, have engaged in robust initiatives to forestall and expose transactions involving ill-gotten gains. This response arises from regulatory obligations and a commitment to safeguard their reputational integrity.

In 2001, the South African government introduced the Financial Intelligence Centre Act (FICA) alongside complementary Anti Money Laundering and Counter Financing of Terrorism legislation.

The primary intent of these legislative measures is to combat money laundering and the financing of terrorism. FICA incorporates a range of control mechanisms to facilitate the identification and investigation of money laundering and terrorist financing activities.

It also places specific obligations on accountable institutions concerning initiating client relationships and ongoing management.

Notably, these obligations encompass the pivotal “Know Your Client” (KYC) procedure, mandating the establishment and verification of the identity of all clients before entering into a business relationship or executing a transaction.

Furthermore, regular updates to client information are imperative to ensure accuracy and alignment with evolving legislative mandates and international industry benchmarks.

MVA’s “Know Your Client” (KYC) Prerequisites: The stipulated KYC information and documentation prerequisites are outlined below.

However, it should be noted that these requirements represent the baseline, and in certain instances, supplementary information and/or documentation may be solicited.

The documents submitted must either be:

1. Originals
2. Copies of the original documents verified by an MVA staff member
3. Copies of the original documents endorsed by an independent Commissioner of Oaths (Please be advised that the certification must bear the full name, title, and signature of the Commissioner of Oaths, with the statement “Certified true copy of” included. In cases where the document spans multiple pages, the certification must appear on the initial and concluding pages, with the Commissioner’s initials on each intervening page.)

Should any inquiries arise regarding these prerequisites or if the requisite documents cannot be furnished, we invite you to contact us for guidance.

FICA Compliance – Individual

• Passport and substantiation of reported loss or theft of identification or driver’s license
• A clear copy of a document confirming both name and address
• SARS-issued e Tax and VAT registration number

Requirements for Compliance – Company Documentation

In compliance with the stipulations of FICA, the following company statutory documents are requisite:

1. Certificate of Registration
2. Memorandum of Incorporation
3. All signatures on the Certificate of Name Change (if applicable) are those of a company director.

Additionally, evidence substantiating the company’s operational location is obligatory.

This may take the form of an invoice, a rate bill, or equivalent documentation.

Further, a formal letter from the auditors attesting to the composition of the shareholding is mandatory.

In alignment with FICA regulations, confirmation of the company’s tax status is essential. This necessitates the provision of an official document issued by SARS, verifying the Income Tax and VAT registration numbers.

To establish proper authority, a resolution from the company’s board of directors appointing the authorized representative is requisite.

Moreover, certified copies of the identification document of the designated authorized representative must be provided.

Lastly, the endorsed proof of residential address of the authorised representative forms a crucial part of this compliance procedure.