Page 88 - The Corporate Report Pack

e importance of data in a compliance driven organisation
e e ects of the FIC Amendment Bill on future data requirements
Eva Crouwel and Jan Peyper
e requirements contained in the FIC Amendment Bill represent a shi from a largely rules-based ‘one size- ts all’ AML and CFT compliance regime to a risk-based framework of compliance.
Introduction
Client and transactional data form an integral part of a nancial institution’s anti-money laundering (AML), countering the nancing of terrorism (CFT) and sanctions compliance capability. By now, most nancial institutions would have experienced the downstream consequences of having insu cient or poor quality data on their ability to adequately mitigate the risks associated with money laundering and terrorist nancing.
e Financial Action Task Force (FATF), the global AML and CFT standards body (of which South Africa is a member), conducted an evaluation of South Africa’s AML landscape in 2009. Among other things, it identi ed a number of shortcomings in respect of South Africa’s primary AML and CFT legislation, the Financial Intelligence Centre Act (FIC Act). e introduction of the FIC Amendment Bill in 2015 is looking to address these shortcomings and is aimed at bringing South African AML and CFT legislation in line with international best practice.
e requirements contained in the FIC Amendment Bill represent a shi from a largely rules-based ‘one size- ts all’ AML and CFT compliance regime to a
risk-based framework of compliance. is change will have a far-reaching impact on nancial institutions’ data requirements as well as the way in which nancial institutions gather, store and process this data.
While many nancial institutions are still in the process of playing catchup to address their legacy challenges (for example, by making system changes and remediating existing client data), others are already preparing for the changing regulatory landscape. is article aims to provide a brief overview of the changes we can expect within the AML and CFT landscape as well as what the associated burden and bene ts of compliance are.
Part I: An overview of the current AML, CFT and sanctions data requirements
e existing South African FIC Act requires nancial institutions to gather a standard set of information from each client before entering into a business relationship or concluding a single transaction with a (prospective) client. is information is referred to as ‘client identi cation and veri cation’ (CIV) information. e nature and extent of information required depends on whether the client is a natural or legal person.
4 The Corporate Report
The importance of data in a compliance driven organisation