FICA legislation – New Due Diligence Requirements for Businesses
On the 29th of November 2022, Schedule 1 of the Financial Intelligence Centre Act (FICA) was amended. FICA requires businesses that are designated as Accountable Institutions (AIs) to comply with a wide range of regulatory requirements that cover due diligence, identity verification, sanction screening, record-keeping, reporting of information to the Financial Intelligence Centre, and internal compliance governance.
The recent revisions to the Act have broadened the definition of Accountable Institutions (AI). This means that some businesses now have legal obligations for due diligence checks. If they don’t, they face the threat of massive fines.
In light of these legislative changes, ThisIsMe has drastically reduced our pricing on several key solutions. This makes vital services more affordable so that a greater variety of businesses can ensure their FICA compliance with ease.
In addition to the revised FICA legislation, South Africa’s greylisting at the start of 2023 has further increased the pressure on businesses to ensure regulatory compliance.
Drastically Reduced Barrier to Entry for Key Sanctions Checks and PEP/DPIP & FPPO Checks
Given how crucial AML screening has become with SA's recent greylisting and updated accountable institution legislation, ThisIsMe has drastically reduced the barrier to entry of key PEP/DPIP & FPPO checks.
Pricing on PEP/DPIP & FPPO Checks has been reduced by up to 50%.
Our more affordable pricing range means that a greater number of businesses now have access to the due diligence checks that are essential for ensuring transactional security and maintaining regulatory compliance.
These price reductions make ThisIsMe’s solutions some of the most affordable, reliable and efficient in South Africa.
What Are Sanction Checks?
“Sanction” is a broad term that refers to penalties imposed upon an individual, entity or country as punishment. Typically, sanctions will be imposed for reasons such as the violation of internationally acclaimed standards, the abuse of human rights, or the infringement of the laws to protect the legal financial system. However, sanctions may also be imposed for a wide variety of political, social and economic reasons.
If a business does not complete sanction checks, that business puts itself in danger of actively breaching sanctions law. This has the potential to be devastating for several reasons, including financial and legal penalties, reputational damage, and being the target of sanctions oneself.
What are PEP, DPIP & FPPO Checks?
A Politically Exposed Person (PEP) is a broad term that refers to individuals who currently hold or have held political power (e.g., a member of parliament or head of state).
Due to the interwoven nature of politics and private capital, governments and financial institutions worldwide agree that PEPs represent an increased money-laundering risk. This is because individuals who hold political power can abuse their power to engage in money laundering and other financial crimes like corruption, bribery, embezzlement and the financing of terrorism.
To account for this risk, national regulators ensure that PEPs and the various sub-categories of PEPs are subjected to Enhanced Due Diligence (EDD) procedures designed to scrutinize the connections between a PEP’s political power and financial transactions.
A Domestic Prominent Influential Person (DPIP) is a type of Politically Exposed Person (PEP). In South Africa, the FIC defines a DPIP as follows:
“A domestic prominent influential person is an individual who holds, (including in an acting position) for a period exceeding six months, or has held at any time in the preceding 12 months in South Africa, a prominent public function as listed in Schedule 3A of the FIC Act.” – FIC.
A DPIP is different from a Foreign Prominent Public Official (FPPO). In South Africa, according to the Financial Intelligence Center, a FPPO is defined as:
“A foreign prominent public official (FPPO) is an individual who holds, or has held at any time in the preceding 12 months, in a foreign country a prominent public function as listed in Schedule 3B of the FIC Act.” – FIC.
In South Africa, Accountable Institutions of various classifications are required to check for PEP, DPIP and FPPO status in certain circumstances. The recent revisions to FICA legislation mean that a greater number of businesses will have to conduct these checks in a more diverse set of contexts.
Because of this, lowering the barrier to entry is essential in order for more businesses to have affordable access to the essential due diligence checks that are crucial for securing our economy and placing trust back in transactions.
Sanction and PEP Checks and Identity Verification Services for South Africa
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. Committed to world-class standards for data handling and data privacy, ThisIsMe is proud to be at the forefront of a trust-based and privacy-compliant digital world. To experience our full suite of advanced due diligence services, contact our team here.