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

Notices

Guidance Note 3

Guidance for Banks on Customer Identification and Verification and Related Matters

Exemptions

29. Clarification of Exemption 5 - foreign clients
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Exemption 5 of the Exemptions deals with countries situated in a foreign jurisdiction. According to Exemption 5 accountable institutions, including banks, are exempted from compliance with the provisions of section 21 of the FIC Act that require the verification of the identity of a client of that institution, if:

•the client is situated in a country, where, to the satisfaction of the relevant supervisory body, anti-money laundering regulation and supervision of compliance with such anti-money laundering regulation, which is equivalent to that applicable to the bank, are in force;
•a person or institution in that country, which is subject to antimony laundering regulation confirms in writing, to the satisfaction of the bank that the person or institution, has verified the particulars concerning that client that the bank had obtained in accordance with section 21 of the FIC Act; and
•the person or institution undertakes to forward all documents obtained in the course of verifying such particulars to the bank.

 

The country in which the client is situated has to have anti-money laundering regulation and supervision of compliance with such antimony laundering regulation in force. All FATF member countries are deemed to have adequate anti-money laundering legislation and supervision of compliance with such legislation in place.

 

If a country is not a FATF member country, more careful scrutiny of the anti-money laundering/combating of terrorist financing systems in that country should be undertaken to establish whether the requirements applicable to a specific institution are equivalent to the requirements of the South African legislation. If this is not the case, this exemption does not apply, and the entity has to be identified and verified as stipulated in the FIC Act and the Regulations.