Sentinel is what is termed an Accountable Institution. As such, we are legally obliged to assist the Financial Intelligence Centre (FIC) to fight the scourge of money laundering and terrorist financing.
We are not alone in this. All financial institutions both in South Africa and globally are expected to assist in stemming these crimes. In our dealings with clients, both long-standing and new, we are expected to collect and record evidence that, should the FIC ask, can prove that:
- Our clients are well known to us
- We are aware of the source of their funds
- We know how their funds are used
The requirements are onerous and ongoing, and the cost for failing to comply can be as high as R100 million. Remaining compliant involves all stakeholders – including you, our valued client.
Every firm is different
Sentinel has a board-approved risk management compliance plan. This sets out the risks that we encounter and the controls needed to manage such risk. Every Accountable Institution, must have such a plan… But as their risks may differ from ours, so too may their controls.
This means that what we require from you in terms of our controls may be more or less onerous than that required by, for instance, your bank. The two must not be compared – each institution is enforcing their controls according to their risks and in terms of the law.
An ongoing requirement
Because the law makes ongoing due diligence of all clients a requirement, we will be required to put considerable time and effort into meeting our obligations. What’s more, our compliance plan may change and further documents may be required on an annual or ad hoc basis. Your complete co-operation in satisfying our requests will make the process more efficient, and thus compliant.
Whilst this may seem tedious, if we as a country wish to stay a part of the global economy it is up to all individuals and financial firms to comply with the spirit of the law in combatting global financial crime and terrorism.
This article was kindly drafted by Sentinel’s independent Compliance Officer, Trish Reed of Practical Compliance Solutions Pty Ltd. Trish can be contacted on email@example.com