Suspicious transactions Flashcards
(14 cards)
What are the two types of transactions that must be reported under FICA?
1) Cash transactions (s.28), 2) Suspicious or unusual transactions (s.29)
When must cash transactions be reported under FICA?
When they are R49,999.99 or more, including both physical and electronic transfers, regardless of suspicion.
When must suspicious transactions be reported under FICA?
Regardless of the amount, if there is knowledge, suspicion, or if the person ought reasonably to have known it involves proceeds of crime.
What is the difference between suspicion and speculation?
Suspicion is more than speculation but less than belief; it requires a reasonable foundation.
What are some indicators of suspicious transactions?
- Unusual client behavior
- Transactions inconsistent with profile
- Requests for secrecy
- Cash-intensive business with no logical explanation
- Third-party involvement with unclear roles
- Structured transactions to avoid detection
What are the two types of knowledge relevant to suspicious transactions?
Actual knowledge (direct awareness) and constructive knowledge (ought to have known).
Give an example of constructive knowledge.
A client arrives with R3 million in cash claiming to have sold a vintage Ferrari — failure to question = failure to comply.
What is the internal reporting process for suspicious transactions?
1) Employee suspects → reports to MLRO
2) MLRO investigates
3) If valid, MLRO submits report to FIC
What is the external reporting process to the FIC?
MLRO must report within 15 working days using the FIC’s standard form (email, fax, etc.).
Who is the MLRO and what are their responsibilities?
The Money Laundering Reporting Officer – must act independently, conduct investigations, and report valid suspicions to FIC.
What is “tipping off” under FICA?
It is a criminal offence to alert a client that a suspicious transaction report has been or will be made.
Is it ever permissible to make inquiries with the client?
Yes, if more info is needed to confirm suspicion, as long as it’s not misleading or obstructive.
What are the penalties for tipping off under FICA?
Up to 15 years imprisonment and/or a R100 million fine.
What are the key duties and requirements for Accountable Institutions under FICA?
- Report knowledge/suspicion
- Follow internal process (Employee → MLRO → FIC)
- Report within 15 working days
- Do not tip off clients
- Train staff, have clear internal policies, and appoint a qualified MLRO
