• • &nsbp;
  • professional accountants;
  • persons who provide trust and/or company services;
  • dealers in high value goods (including, amongst others, precious metals and stones, motor vehicles and coins);
  • co‑operatives which provide financial services as defined in the Co‑Operatives Banks Act of 2007;
  • short‑term insurers as defined in the Short‑Term Insurance Act of 1998;
  • credit providers who are required to register in terms of Section 40 of the National Credit Act of 2005;
  • money or value transfer providers;
  • providers of private security boxes or security vaults for the safekeeping of valuables;
  • auctioneers (including sheriffs when performing the job of an auctioneer at a public auction);
  • dealers in copper material; and
  • virtual currency exchanges where virtual currency is bought and sold for fiat currency.

5. The Amendment Act introduces a number of new concepts including customer due diligence methods and the requirement for each accountable institution to prepare and implement a Risk Management and Compliance Programme which must be approved by the board of directors, senior management or other person or group exercising the highest level of authority in an accountable institution.
6. In addition, the Amendment Act introduces two additional schedules, namely Schedule 3A and 3B, which introduce the concepts of domestic prominent influential persons and foreign prominent public officials.
7. The Amendment Act requires that accountable institutions which determine that a prospective client is a domestic prominent influential person or a foreign prominent public official (as defined):

• • obtain senior management approval for establishing the business relationship;
  • take reasonable measures to establish the source of wealth and source of funds of the client; and
  • conduct enhanced ongoing monitoring of the business relationship.

8. The Amendment Act also introduces the requirement to identify the beneficial owners of legal entities by determining the identity of each natural person who, independently or together with others, has a controlling ownership interest in that legal person. The beneficial ownership of trust and partnerships is also dealt with in detail.
9. The requirements relating to record keeping are clearly dealt with and boil down to the simple principle that records kept must “enable a reconstruction of the transaction”. All records are required to be kept for a period for a period of 5 years from the date the business relationship terminated.
10. All of the amendments implemented by the Amendment Act are intended to bring South Africa further in line with international “know your client” standards.
11. Should you require any assistance or advice with regard to the Act or the Amendment Act, please contact Terry Brett.

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