General Obligations
Unlock the secrets to safeguarding your organization and contributing to a secure financial environment with the General Obligations Training Video. In today's fast-paced world, financial crimes and illicit activities pose a significant threat to businesses and economies. To combat these risks, it is crucial for financial professionals and organizations to understand and adhere to the Financial Intelligence Act 13 of 2012 as amended (FIA).
FIA Obligations
Accountable Institutions (AIs) play a crucial role in preventing and detecting financial crimes such as money laundering and terrorist financing. They are obliged to comply with the regulations and guidelines set forth by the Financial Intelligence Act (the FIA) to ensure the integrity of the financial system. This training will focus on the general obligations that AIs must comply with.
1. Risk Assessment (Section 39 (1))
Conduct regular risk assessments to identify and mitigate AML and CTF risks within the institution; and Adjust policies and procedures based on the assessed risks.
2. Customer Due Diligence (CDD) (Section 21 and 22 of FIA)
AIs must perform robust CDD procedures on all their customers. This involves verifying and identifying their clients when concluding a single transaction or when establishing a business relationship; and Enhanced due diligence is required for high-risk customers, transactions, and PIPs
3. Record-Keeping
AIs must maintain accurate and up-to-date records of client identification information, transactional records, and suspicious transactions reports submitted to the FIC; and All records must be kept for a period of five years from the date the transaction is concluded.
4. Reporting Suspicious Transactions and Activities (Section 33 of FIA)
AIs are obligated to report any suspicious transactions and activities to the FIC; The filing of suspicious transactions and activities must be promptly; and Meaning without delay, but not later than three days.
5. Training and Awareness (Section 39 (5) (b)
Employees of AIs should receive regular training on anti-money laundering (AML) and counter-terrorist financing (CTF); and Staff members must be aware of their responsibilities in identifying and reporting suspicious activities.
6. Internal Controls and Policies (section 39 (4))
AIs must establish and maintain internal controls and policies to prevent money laundering and terrorist financing.
7. Appointment of a designated compliance officer (Section 39 (6))
AIs should appoint a designated compliance officer responsible for overseeing AML and CTF measures.
8. UNSC Sanctions Screening (Section 24)
AIs must screen customers and transactions against government-issued sanctions lists to ensure they are not dealing with sanctioned individuals or entities. Must develop audit functions, monitor compliance with internal rules and AML/CFT legal framework. Section 39(8)
9. Ongoing Monitoring (section 24)
Continuously monitor customer transactions to identify any unusual or suspicious behavior. Implement automated monitoring systems where applicable.
10. Reporting Large Cash Transactions (Section 32)
Report all cash transactions above NAD 99 999.99 threshold to the FIC as required by regulations. This threshold may vary depending on the jurisdiction.
11. Targeted Financial Sanctions (Sections 25 of the Prevention and Combating of Terrorist and Proliferation Activities Act, 2014); (Section 24 of FIA)
AIs are required to screen their clients against the UNSC sanction lists, once there is a match AIs are required to: freeze the asset of the client that are in your firm’s possession; prohibit such client form being offered the services; and report without delay to the FIC.
12. Prominent Influential Persons (PIPs) (Section 23A of FIA Amendments)
Institutions are expected to outline deliberate mechanisms aimed at identifying PIPs and subjecting them to required controls including:
Seeking management approval before continuing with business relationship; and subjecting PIPs to enhanced due diligence.
13. Independent audit functions (Section 39(8) of FIA)
AIs must develop an audit function, monitor compliance with internal rules and AML/CFT legal framework (Section 39(8) of FIA).
14. Must designate Compliance Officers at management level (Section 39(6))
15. Registration with the FIC (Section 39 (2))
AIs and Reporting Institutions not supervised by or regulated by a supervisory body or regulatory body must register their prescribed particulars with the FIC for the purposes of supervising compliance with the FIA.
Conclusion
Compliance with these general obligations is vital for AIs to fulfil their role in safeguarding the financial system's integrity. Non-compliance can lead to severe legal and financial consequences. Therefore, it is imperative that AIs remain diligent in their efforts to combat money laundering and terrorist financing while staying up to date with evolving regulations and best practices. Compliance not only protects the institution but also contributes to the global efforts to combat financial crime and maintain the integrity of the financial system.
Kindly watch the video and complete the General Obligation quiz below.