Financial Intelligence Centre Act, 2001 (Act No. 38 of 2001)
Guidance Note 4 on Suspicious Transaction Reporting
Money laundering has been criminalised in section 4 of the Prevention of Organised Crime Act, 1998. A money laundering offence may be described as the performing of any act that may result in concealing the nature of the proceeds of crime or of enabling a person to avoid prosecution or in the diminishing of the proceeds of crime.
Apart from criminalising the activities constituting money laundering, South African law also contains a number of control measures aimed at facilitating the detection and investigation of money laundering. These control measures, as contained in the Financial Intelligence Centre Act, 38 of 2001, ("the FIC Act") are based on three basic principles of money laundering detection and investigation, i.e, that:
|•||intermediaries in the financial system must know with whom they are doing business;|
|•||the paper trail of transactions through the financial system must be preserved;|
|•||possible money laundering transactions must be brought to the attention of the Financial Intelligence Centre ("the Centre") and the investigating authorities.|
The control measures introduced by the FIC Act include requirements for institutions to establish and verify the identities of their customers, to keep certain records, to report certain information and to implement measures that will assist them in complying with the Act.
The FIC Act also established the Financial Intelligence Centre which is South Africa's financial intelligence unit, a government agency created to collect, analyse and interpret information disclosed to it and obtained by it. The Centre is an integral part of our country's fight against the global crime of money laundering. In addition, section 4 (c) of the FIC Act empowers the Centre to provide guidance in relation to a number of matters concerning compliance with the obligations of the Act. This Guidance Note is published by the Centre in terms of section 4(c) of the FIC Act.
Application of this Guidance Note
The Centre has prepared this Guidance Note to assist accountable institutions, reporting institutions and any other person as described in section 29 of the FIC Act in meeting their reporting obligations under the Act. It provides general guidance on the nature of reporting under section 29 and explains reporting timelines, how reports have to be sent to the Centre, what information has to be included in these reports and how to use the electronic reporting mechanism.
Guidance provided by the Centre is the only form of guidance formally recognised in terms of the FIC Act and the Money Laundering and Terrorist Financing Control Regulations ("the Regulations") issued under the FIC Act.
Guidance emanating from industry associations or other organisation, therefore, in the Centre's view, does not have a bearing on assessing compliance with the obligations imposed by the FIC Act or the interpretation of its provisions.
The guidance provided by the Centre in this Guidance Note, although authoritative, is provided as general information only. The Guidance Note does not provide legal advice and is not intended to replace the FIC Act or the Regulations issued under the FIC Act. However, failure to forward suspicious transaction reports through to the Centre is an offence in terms of section 52 of the FIC Act.