FICA Flashcards
(12 cards)
What are the two main objectives of FICA?
Prevent laundering of illicit funds and protect the integrity of the financial system.
Who does FICA primarily target?
Compliance mechanisms, not criminals directly.
Who must comply with FICA?
Accountable Institutions listed in Schedule 1 (e.g., banks, attorneys, accountants, estate agents, forex dealers, insurance brokers, stockbrokers).
What are the four key obligations of accountable institutions under FICA?
- Know Your Client (s21–21H)
- Record Keeping (s22–26)
- Suspicious Transaction Reporting (s27–41)
- Internal Rules & Training (s42–43B).
When must Know Your Client (KYC) be conducted?
Before starting a business relationship.
Who does KYC apply to?
Both natural persons and legal entities.
What approach does KYC rely on under the 2022 Amendment?
A risk-based approach.
What is the benefit of a risk-based approach in FICA compliance?
It allows flexibility and efficient allocation of resources.
What is a potential pitfall of the risk-based approach?
Inconsistent application or failure to properly assess risk may lead to compliance failures.
What do sections 22–26 of FICA require accountable institutions to retain?
Records of client identity verification, transactions, business relationships, account activity, and KYC documentation.
For how long must these records be retained?
Minimum of 5 years—from the date of the transaction or the termination of the business relationship.
What are the consequences of failing to comply with the record keeping obligations under FICA?
Administrative sanctions, criminal liability, and fines or imprisonment under sections 68–69.
