South Africa
Financial Intelligence Centre Act, 2001
Guidance Note 4: Suspicious transaction reporting, 2008
Government Notice 301 of 2008
- Published in Government Gazette 30873 on 14 March 2008
- Assented to on 13 March 2008
- Commenced on 14 March 2008
- [This is the version of this document from 14 March 2008.]
Glossary
“The Centre” means the Financial Intelligence Centre established in terms of section 2 of the FIC Act.“FIC Act” refers to the Financial Intelligence Centre Act, 2001 (Act No 38 of 2001), as amended.“POCA” refers to the Prevention of Organised Crime Act, 1998 (Act No 121 of 1998), as amended.“Regulations” refer to the Money Laundering and Terror Financing Control Regulations made in terms of section 77 of the FIC Act and promulgated in Government Notice 1595 of 20 December 2002 as amended by Government Notice R456 of 20 May 2005.“Reporter” refers to the person or entity making the report.“STR” refers to a suspicious or unusual transaction report submitted in terms of Section 29 of the FIC Act.Introduction
The FIC Act provides for the reporting of suspicious and unusual transactions. The FIC Act repealed section 7 of the POCA and from 3 February 2003 the duty to report suspicious and unusual transactions is governed by section 29 of the FIC Act.Accountable institutions, reporting institutions and any other person as described in section 29 of the FIC Act have a role to play in South Africa’s efforts to prevent money laundering and terrorist financing. It is imperative that accountable institutions, reporting institutions and any other person that comes into contact with a financial transaction that is potentially linked to money laundering or terrorist financing, report his or her suspicion to the Centre.The reporting of suspicious and unusual transactions is regarded as an essential element of the anti-money laundering programme for every country. The international standard on measures to combat money laundering and terrorist financing, in the form of the Forty Recommendations of the Financial Action Task Force (“the FATF”) on Money Laundering, provides the following concerning the reporting of suspicious transactions:This Guidance Note is divided into six parts:Part 1 provides information to help persons determine whether they fall within the category of persons for whom a reporting obligation under section 29 of the FIC Act could arise.Part 2 provides information to help persons determine when the obligation to report under section 29 of the FIC Act arises.Part 3 provides information to help persons understand the nature of a suspicion.Part 4 provides examples of indicators that may be taken into consideration to determine whether a transaction should give rise to a suspicion.Part 5 provides information on the implications of masking a report under section 29 of the FIC Act to the Centre.Part 6 provides a step-by-step guideline to the use of the internet-based reporting mechanism.Part 1 – Who must report?
Part 2 – What gives rise to the obligation to report?
Part 3 – What is the nature of a suspicion?
Part 4 – Indicators of suspicious and unusual transactions
Unusual business
Deposits of funds with a request for their immediate transfer elsewhere;Unwarranted and unexplained international transfers;The payment of commissions or fees that appear excessive in relation to those normally payable;Lack of concern about high commissions, fees, penalties etc. incurred as a result of a particular type of transaction or particular method of transacting;Transactions do not appear to be in keeping with normal industry practices;Purchase of commodities at prices significantly above or below market prices;Unnecessarily complex transactions;Unwarranted involvement of structures such as trusts and corporate vehicles in transactions;A transaction seems to be unusually large or otherwise inconsistent with the customer’s financial standing or usual pattern of activities;Buying or selling securities with no apparent concern for making a profit or avoiding a loss;Unwarranted desire to involve entities in foreign jurisdictions in transactions.Knowledge of reporting or record keeping requirements
A customer attempts to convince employee not to complete any documentation required for the transaction;A customer makes inquiries that would indicate a desire to avoid reporting;A customer has unusual knowledge of the law in relation to suspicious transaction reporting;A customer seems very conversant with money laundering or terrorist activity financing issues;A customer is quick to volunteer that funds are clean or not being laundered.Identification
The use of a seemingly false identity in connection with any transaction, including the use of aliases and a variety of similar but different addresses and, in particular, the opening or operating of a false name account;Opening accounts using false or fictitious documents;A customer provides doubtful or vague identification information;A customer refuses to produce personal identification documents;A customer changes a transaction after learning that he must provide a form of identification;A customer only submits copies of personal identification documents;A customer wants to establish identity using something other than his or her personal identification documents;A customer’s supporting documentation lacks important details such as contact particulars;A customer inordinately delays presenting corporate documents; orAll identification presented is foreign or cannot be checked for some reason.General
A customer provides insufficient vague or suspicious information concerning a transaction;Accounts that show unexpectedly large cash deposits and immediate withdrawals;A frequent exchange of small denomination notes for larger denomination notes;Involvement of significant amounts of cash in circumstances that are difficult to explain.Suspicious transaction reports - threshold
Should the closing of an account be regarded as suspicious?
Part 5 – What are the implications of making a STR?
Can an institution continue transacting with a customer after a STR has been made?
Confidentiality and privilege
The reporter enjoys legal protection concerning a report submitted to the Centre
Tipping off
Are there any defences associated with the reporting obligation?
Reactive reporting
Part 6 – Process for submiting STRS to the Centre
What is the time period for reporting a suspicious transaction?
How should a STR be submitted?
Batch reporting
Reporters also have the option of submitting STRs via batch reporting. Batch reporting is used in instances where high volumes of STRs are submitted to the Centre on a regular basis. To be able to access this facility, reporters can forward their requests to the following email address: fic01@fic.gov.zaInformation to be provided in a STR
What happens to a STR after being submitted to the Centre?
Completion of the STR form
Example of a field:
User name and password
Username | |
Password | |
Important to remember when completing the STR formDo not to leave any spaces in the information entered into the relevant fields.Do not use any punctuation marks such as dashes, colons or forward or back slashes when reporting account numbers, branch numbers or amounts. |
Examples | ||
---|---|---|
Incorrect | Correct | |
Time | 2pm | 14:00 |
Currency | R | ZAR |
Amount | R 2 000 000 | 2000000 |
Account No. | 2359-34-67 | 23593467 |
Tel. No. | (012) 309 9200 | 0123099200 |
Date | 2008/05/30 | 20080530 |
Completing Part A: Particulars of person or entity from which STR emanates
Example for individual reporting:
Example of company report:
Example of Part A(2):
Completing Part B: Particulars of transaction reported
Example of Part B:
Transaction(s) (fields B1a to B1c)
Type of funds (field B2)
Amount of Transaction (s) in Rand value (field B3)
Currency (field B4)
Description of the property (field B5)
Example | |
---|---|
Incorrect | Correct |
The property is: Erf 1234 Marlborough 160 | Erf 1234 Marlborough 1610 |
Value of property (field B6)
Method transaction was conducted (field B7)
Stated purpose of the transaction (field B8)
Method in which funds were disposed of (field B9)
Amount of disposition (field B10)
Currency (field B11)
Method in which property was disposed of (field B12)
Name of other institution or person (field B13)
Account number at other institution (field B14)
Branch where the transaction was conducted (field B15)
Identifying number of branch (field Bl6)
Remarks, Comments, Explanations (field B17)
Completing Part C: Particulars of accounts involved in transaction
Example of Part C:
Account number (field C1)
Branch where account is held (field C2)
identifying number of branch (field C3)
Type of account (field C4)
Name of each account holder (field C5)
Date opened (field C6)
Date closed and closed by (fields C7 and C8)
Status of account (field C9)
Previous activity on the account (field C10)
Report number (field C11)
Completing Part D: Particulars of person or entity concerning whom report is made
Example of Part D:
This report concerns: (field D1)
Surname, first names and other initials (fields D2 to D4)
Identifying number (field D5)
Type of identifier (field D6)
Country of residence (field D7)
Contact phone number (field D8)
Person’s occupation (field D9)
Photograph (field D10)
Name of entity (field D11)
Identifier number (field D12)
Type of business (field D13)
Country of origin (field D14)
Person with authority to transact (field D15)
Street Address (field D16 to D18)
Completing Part E: Particulars of person conducting transaction
Example of Part E:
Completing Part F: Particulars of suspicious activity
Completing Part G: Particulars of action taken
Completing Part H: List of available documents
History of this document
14 March 2008 this version
Commenced
13 March 2008
Assented to
Cited documents 2
Legislation 2
1. | Prevention of Organised Crime Act, 1998 | 1034 citations |
2. | Financial Intelligence Centre Act, 2001 | 966 citations |