Acts Online
GT Shield

Financial Intelligence Centre Act, 2001 (Act No. 38 of 2001)

Notices

Guidance Note 4 on Suspicious Transaction Reporting

Introduction

 

The FIC Act provides for the reporting of suspicious and unusual transactions. The FIC Act repealed section 7 of the POCA and from 3 February 2003 the duty to report suspicious and unusual transactions is governed by section 29 of the FIC Act.

 

Accountable institutions, reporting institutions and any other person as described in section 29 of the FIC Act have a role to play in South Africa's efforts to prevent money laundering and terrorist financing. It is imperative that accountable institutions, reporting institutions and any other person that comes into contact with a financial transaction that is potentially linked to money laundering or terrorist financing, report his or her suspicion to the Centre.

 

The reporting of suspicious and unusual transactions is regarded as an essential element of the anti-money laundering programme for every country. The international standard on measures to combat money laundering and terrorist financing, in the form of the Forty Recommendations of the Financial Action Task Force ("the FATF") on Money Laundering, provides the following concerning the reporting of suspicious transactions:

 

"Recommendation 13

 

If financial institutions suspect that funds stem from criminal activity, they should be required to report promptly their suspicions to the competent authorities".

 

The FATF is an inter-governmental body that engages in the development and promotion of national and international policies and standards to combat money laundering and terrorist financing. It works to generate the necessary political will to bring about legislative and regulatory reforms in these areas. The FATF has developed internationally recognised standards for measures to combat money laundering and terror financing in the form of the Forty Recommendations and the Nine Special Recommendations on Terrorist Financing. Further information concerning the FATF is available at http://www.fatf-gafi.org.

 

This Guidance Note is divided into six parts:

• Part 1 provides information to help persons determine whether they fall within the category of persons for whom a reporting obligation under section 29 of the FIC Act could arise.
• Part 2 provides information to help persons determine when the obligation to report under section 29 of the FIC Act arises.
• Part 3 provides information to help persons understand the nature of a suspicion.
• Part 4 provides examples of indicators that may be taken into consideration to determine whether a transaction should give rise to a suspicion.
• Part 5 provides information on the implications of masking a report under section 29 of the FIC Act to the Centre.
• Part 6 provides a step-by-step guideline to the use of the internet-based reporting mechanism.