Financial Intelligence Centre Act, 2001 (Act No. 38 of 2001)
Guidance Note 3
Guidance for Banks on Customer Identification and Verification and Related Matters
Anti-Money Laundering and Terrorist Financing Policies and Procedures
2. Implementation of Guidance Note 1 in respect of a risk-based approach
Although the FIC Act and the Regulations do not expressly make reference to a risk-based approach, in respect of identification and verification of client particulars, this issue is covered in Guidance Note 1 issued by the Centre in April 2004, and distributed by the Registrar of Banks in terms of Banks Act Circular 4/2004.
Guidance Note 1 indicates that application of a risk-based approach to the verification of the relevant particulars implies that a bank can accurately assess the risk involved. It also implies that a bank can take an informed decision on the basis of its risk assessment as to the appropriate methods and levels of verification that should be applied in a given circumstance.
Guidance Note 1 further states that the assessment of these risk factors should best be done by means of a systematic approach to determine different risk classes and to identify criteria to characterize clients and products. In order to achieve this, a bank would need to document and make use of a risk framework. Such a risk framework should preferably form part of the bank‘s internal policies and procedures to address money laundering and terrorist financing referred to in paragraph 1, above.