RCMP Guidelines

RMCP TEST GUIDELINE

FICA RMCP TEST

BASED ON THE NEW RISK- BASED APPROACH & THE RISK MANAGEMENT COMPLIANCE PROGRAMME

INTRODUCTION RMCP
- What does the FICA RMCP stand for?

Risk Management and Compliance Programme
Risk Management and Customer Programme
Risk Management and CPD Programme

What is the RMCP?

The Risk Management and Compliance Programme (“RMCP”) is a documented plan that establishes guidelines and procedure to ensure full compliance with the FIC Act in identifying, measuring, monitoring, managing and reporting the material risks to which the enterprise may be exposed.

(a) True

(b) False

Who does the RCMP apply to?

All accountable institutions listed in Schedule 1 of FICA. Financial Service Providers (FSP’s), excluding those FSP’s only approved for short-term insurance and/or health services benefits.
All accountable institutions listed in Schedule 1 of FICA. Financial Service Providers (FSP’s), including those FSP’s only approved for short-term insurance and/or health services benefits.

Who is responsible for FICA compliance in the business?

(a) Random Name of Individual in Business

(b) Random Name of someone in senior management

GENERAL DUTIES

Our FSP, as an accountable institution, have the duty to:

Register as an accountable, institution with the FIC; which we have done;
Train all our representatives and all administration staff;
Ensure appropriate governance measures;
Develop, document, maintain and implement an anti-money laundering and counter-terrorist financing risk management and compliance programme;
Perform customer due diligence which includes our duty to identity and verify a client using a risk-based approach;
Keep and Maintain records;
Report to the Centre;

1, 4 and 5
1, 4, 5 and 6
All of the above

OBJECTIVE

The objective of the RMCP is to:

Enable our employees to identify what suspicious and unusual transactions are as well as the reporting process. To assist with the fighting of terrorist and money laundering activities.
To Train our employees to enable them to comply with the legislation and the Risk Management and Compliance Programme applicable when identifying and verifying client details in accordance with section 21 and 22 of the Financial Intelligence Centre Act.
Enable the FSP and employees to comply with the record keeping requirements of documents.

(a) a only

(b) a and c

3.2 Choose the incorrect statement below:

Relevant to the new RMCP’s are the following key elements:

(a) A customer friendly approach based on customer due diligence is presented as promoting the efficient use of resources and less weighty for low-risk clients.

(b) Cost-effective implementation process in line with the Treating Customers Fairly (TCF) concept will be incorporated to prevent a wholesale approach to customers.

(d) The Board of directors and senior managers with the requisite skill, understanding and oversight of the business and key risks will be tasked with supervising and signing off risk management processes and controls allowing for enhanced governance.

3.3 Choose the correct statement below.

To design and implement an appropriate Risk Management Compliance Programme (RMCP)

(a) An accountable institution is required to have a comprehensive understanding of its client’s business,

(b) The RMCP must be designed and implemented according to the size of the organization;

(c) The nature and complexity of business; type of clientele, geographic location, type of product or service offered and their delivery channels.

(d) All of the above

3.4 Choose the correct statement regarding the new RMCP

(a) Understand the nature of the business relationship to ascertain the frequency and nature of

the transactions likely to be engaged in with the client.

(b) Senior management with the requisite knowledge and authority to make decisions must be

responsible for signing off risk processes and controls.

(c) The use of government-controlled bodies as the first sources of information such as the South African Revenue Authority, Commission for Intellectual Property, Master of the High Court, Home Affairs etc.

(d) All of the above

GOVERNANCE

Who in the FSP is responsible for the effective management of anti-money laundering and the ongoing compliance of the RMCP?

(a) Name of Directors

(b) Name of Money Laundering Control Officer

Where can you as staff and advisors access the RCMP?

OneDrive
Hard drive
List the correct option

SCOPE

5.1 To whom does the RMCP applies in [Name of FSP]:

(a) Staff and representatives

(b) Only representatives

REGISTRATION

6.1 Section 43B of the FIC Act (as amended) requires every accountable institution and reporting institution to register with:

FICA
FIC

6.2 Financial Intelligence Centre Act No. 38 of 2001

(also known as “FICA”), as amended by the Financial Intelligence Centre Amendment Act of 2017.

True
False

6.3 The Financial Intelligence Centre Act No. 1 of 2017 (The Act) came into operation on:

(a) 13 June 2017

(b) 30 July 2017

6.4 Financial Intelligence Centre is:

The Financial Intelligence Centre is South Africa’s national centre for gathering, analysis and dissemination of financial intelligence. It was established to identify proceeds of crime, combat money laundering and the financing of terrorism

True
False

6.5 The penalty for not registering with FIC is?

a fine not exceeding R10 million or imprisonment for a period of up to 5 years.
a fine not exceeding R5 million or imprisonment for a period of up to 3 years.

REGULATORY FRAMEWORK

7.1 South Africa has two main legislative systems in place to combat/enforce money laundering,

namely:

FICA, POCA
FICA, POCA, POCDATARA
POCA
FICA

7.2 What does the abbreviation FICA mean: Choose the correct one

Financial Intelligence Centre Act
Financial Information Centre Act

7.3 What does the abbreviation POCA mean: Choose the correct one

Prevention of Organised Syndicates ACT
Prevention of Organised Crime ACT

7.4 What does the abbreviation POCDATARA mean: Choose the correct one

Protection of Constitutional Democracy Against Terrorism and Related Activities
Protection of Crime Democracy Against Terrorism and Related Activities

7.5 What is money laundering (ML)

(a) Money laundering is the act of placing criminal or illegal money into the legal financial system in a way that looks legitimate and does not draw the attention of banks or other law enforcement agencies.

(b) Money laundering is the act of placing legal money into the legal financial system in a way that looks legitimate and does not draw the attention of banks or other law enforcement agencies.

7.5 What is terrorism financing?

(a) Terrorism financing is the provision of funds or providing financial support to individual terrorists or non-state actors.

(b) Terrorism financing is the provision of funds or providing financial support to local welfare organisations.

7.6 The core goals of the _____ are to implement global policies to target and combat money laundering.

(a) FIC

(b) FICA

7.7 An Accountable Institution is defined as:

An accountable institution is any person or entity as described in Schedule 1 of the Financial Intelligence Centre Act No. 38 of 2001 who must ensure adherence to the legal requirements and responsibilities as set out therein.

True
False

7.8 Single Transaction:

Is a transaction which can be described as occasional or once-off business

(a) True

(b) False

7.9 Transaction

Means – receiving an instruction or application, or attempt at an instruction or application that will result in an alteration or conclusion of any policy / contract; and / or receiving an instruction or application, or attempt at an instruction or application, that would create an inflow or outflow of funds on any new or existing policy / contract.

(a) True

(b) False

APPROACH TO RISK

8.1 Choose the incorrect statement below: The RMC Programme must enable the FSP to:

(a) identify, assess, monitor, mitigate & manage

(b) develop, document, maintain & implement

8.2 The following aspects should be taken into consideration when doing a client’s risk.

Client (type, nature of relationship, political exposure
Geographical area (location of client)
Product/Service (nature of product/service and risk of use for money laundering)
Delivery method (location of product and risk of use of money laundering)

a (B) a, c, (C) a, b, c (D) All of the above

8.3 What is Risk Management?

(a) Holding monthly meetings to discuss risks to the business.

(b) Making sure that a business’s premises cannot be broken into.
(c) The process of taking steps to minimise or completely eliminate the likely hood of certain

events happening by reducing and managing risks.
(d) Asking individual staff members what they think the biggest risks are.

8.4 The FICA RISK RATING Checklist takes certain very important factors into account, and must not be completed before we enter into a FICA Related transaction or business relationship with a client. When the client is seen as high risk, additional information must be obtained and approved by the Key Individual.

(a) True

(b) False

8.5 The process will no longer involve merely collecting documents that identify and verify the client but will involve enhanced due diligence in understanding the client, their source of funds.

Choose the correct statement:

(a) Identifying and verification must be done during the course and before the conclusion of the business transaction or single transaction.

(b) Identifying and verification must be done after the business transaction has been concluded.

(d) Accountable Institutions may accept funds before the conclusion of the transaction.

8.7 The following factors must be taken into account in determining the natural person risk class

Choose the incorrect statement:

(a) Expected source of Income/Funds;

(b) If funds are transferred abroad: Risk of Country where funds are transferred to

(d) Client’s Race and Gender.

8.8 Risk Assessment Form to answer the following 4 sets of questions. Choose the incorrect option from Nature of Person:

(a) An Individual/SA Citizen will be Risk rated as a Medium Risk

(b) A Foreigner- High Risk

(d) A Foreign Legal Entity- High Risk

8.9 A high-risk client is:

(a) Persons in business/industry or trading activity where the area of his residence or place of business has a scope or history of unlawful trading/business activity. Where the client profile of the person/s opening the account, according to the perception of the branch is uncertain and/or doubtful/dubious

(b) Non-Resident Customers, High Net worth individuals, Trusts, charities, NGOs and organizations receiving donations, Companies having close family shareholding or beneficial ownership, Firms with ‘sleeping partners’, Politically Exposed Persons (PEPs) of foreign origin, Non face to face customers, and those with dubious reputation as per public information available, etc.

8.10 Choose the correct option from expected source of income/Funds

(a) Salary

(b) Rental income

(d) All of the above

CDD

9.1 What is CDD?

________________________________

9.2 Without CDD, businesses leave themselves open to fraud as well as fines for non-compliance with Anti-Money Laundering (AML) requirements.

(a) True

(b) False

9.3 What are the steps of the CDD process?

will always, first identity and verify the client, understand the business relationship/transaction, screen the client, confirm source of funds/income before entering into a transaction with an existing or new client by completing a client risk rating.
will always, first identity and verify the client, understand the business relationship, screen the client, confirm source of funds/income before entering into a transaction with an existing or new client by completing a client risk rating at a later stage.

9.4 Is CDD an ongoing process or do you only have to do a CDD at your clients first meeting?

Ongoing
Once-off

9.5 Partnerships- must be verified and identified. Choose the correct option.

(a) Establish whether the partnership is known by a name registered with CIPC;

(b) Establish whether the partnership is known by a unique name or number;

(d) Promotional material used by the partnership to sell its services.

9.6 Domestic Prominent Influential Persons (DPIP) – Choose the incorrect option.

(a) A person is a PIP if they hold or act in a relevant position for more than six months or have vacated a position in the previous 12 months.

(b) Requirements that apply to domestic PIPs also extend to their family members and associates.

A Medical Specialist with the Deputy President as one of his patients.

9.7 Choose the incorrect statement regarding client identification that may be used:

(a) The Accountable Institution must use original sources as far as reasonably possible to identify and verify the client. These sources must be accurate and must not have been created by the client;

(b) The information must be corroborated by documentary or electronic means against variable third party sources and the AI must have confidence in the information it has obtained.

Use of information held by a reliable independent third party who is the original source of

information

9.8 When must verification take place?

(a) You do not have to verify a client

(b) Verify a client after the transaction has been completed

9.9 What does it mean to “understand the transaction?

(a) To understand the client’s family background

(b) To understand the view of the frequency and the nature of transactions that could be expected in the normal course of the business relationship with the client and to understand the ML/TF risk associated with the business relationship.

9.10 True or False. What is meant by “source of funds”

(Source of Funds (SOF) refers to the origin of the particular funds or any other monetary instrument which are the subject of the transaction between a Financial Institution and the customer

(a) True

(b) False

9.10 What is a suspicious transaction?

(a) Buying a car with Inheritance money

(b) Transferring your part of your salary to your brother

9.11 Who is a suspicious client?

(a) The client provides his correct physical address

(b) Transactions were conducted without clear reason

(d) Client conducts multiple cash transactions in a single day

a, b, c, d
a, c
b,d
None of the above

9.12 What is FICA Act client due diligence?

To perform a High Medium Low client due diligence before taking on a new client and obtain documentation as prescribed in the FICA RMCP. Visit client residence and/or business premises.

True
False

9.13 The Risk Classification Matrix for Natural Person

Choose the incorrect statement regarding client identification that may be used:

(a) The Accountable Institution must use original sources as far as reasonably possible to identify and verify the client. These sources must be accurate and must not have been created by the client;

(b) The information must be corroborated by documentary or electronic means against variable third party sources and the AI must have confidence in the information it has obtained.

(d) Use of information held by a reliable independent third party who is the original source of information

9.14 Guidance on the new Act was provided by _______________, which sets standards, develops and promotes policies on combating money laundering and terrorist financing.

(a) The FIC

(b) The FSCA

(d) The Financial Action Task Force (FATF)

9.15 Beneficial Owners- Who is the beneficial owner? Choose the incorrect answer.

A beneficial owner is an individual who ultimately owns or controls less than 25% of a company’s shares or voting rights, or who otherwise exercise control over the company or its management.

(b) The natural person who exercises control over through voting rights that attach to classes of shares or by virtue of shareholder agreements.

The above indicators must be eliminated in the order presented.

9.16 Trusts are not incorporated but must be identified and verified whether established in South Africa or outside the borders. Choose the correct option:

(a) The Trust deed must be used to establish the identity of the founder;

(b) Every natural person or trustee who derives their powers to transact on behalf of the trust from

the Trust deed.

The unique identifying number prescribed by the Master. Address of the Master of the High

Court in which the Trust is registered.

(d) All of the above

RECORD KEEPING

10.1 Choose the incorrect statement.

(a) Recordkeeping does not apply to all the information collected on behalf of the client.

(b) Record keeping works hand in hand with CDD to ensure that a paper trail of all transactions is available when requested by authorities.

(c) Recording keeping allows for transparency and accountability to the financial system in cases where criminal investigation is instituted.

(d) Record keeping applies to all the information collected on behalf of the client.

10.2 Choose the correct statement. Recordkeeping is the responsibility of:

Representatives only
Admin staff only
Representatives and admin staff

10.3 For which period of time must records be kept?

(a) must be kept for a minimum of 5 years from the date on which the business relationship is terminated.

must be kept for a minimum of 5 years from the date on which the business relationship was established.

10.4 [Name of FSP] in respect of a single transaction or a transaction concluded in the course of a business relationship, will keep records for at least 5 years from the date on which the transaction is concluded.

True
False

10.5 If a transaction or activity was reported to the Centre by [Name of FSP], then [Name of FSP] do not have to keep these records for a minimum of 5 years from the date on which the report was submitted to the Centre.

(a) True

(b) False

10.6 True or False?

Section 24 of the FIC Act (as amended) confirms that the record keeping obligations of an accountable institution may be performed by a third party on behalf of the accountable institution, as long as the accountable institution has free and easy access to the records and the records are readily available to the FIC and the relevant supervisory body. The accountable institution, however, remains not liable to ensure that the records are kept appropriately. An accountable institution must inform the FIC and its supervisory body with the prescribed particulars regarding the third party.

(a) True (b) False

DUTY TO REPORT

CASH TRANSACTIONS ABOVE THE PRESCRIBED LIMIT

11.1 When the obligation arise to report a cash transaction, what is the prescribed limit that needs to be reported- choose the incorrect statement.

[Name of FSP] acknowledges that the obligation to report arises when CASH more than the prescribed amount of R49,999.99 is being PAID or RECEIVED by [Name of FSP].
[Name of FSP] acknowledges that the obligation to report arises when CASH more than the prescribed amount of R25,000.00 is being PAID or RECEIVED by [Name of FSP].
[Name of FSP] acknowledges that the obligation to report arises when CASH more than the prescribed amount of R50 001.00 is being PAID or RECEIVED by [Name of FSP].

11.2 True or False.

What are aggregated amounts?

It is smaller amounts which when combined add up to the prescribed amount, where it appears that these transactions are linked and that they should be considered as one transaction.

(a) True

(b) False

11.3 What is cash?

(a) Coin and paper money and cheques

(b) Coin and paper money and transfer of money

11.4 What is the time for reporting a cash transaction?

(a) 1 day

(b) 3 days

11.5 What is the method of reporting?

must be filed with the Centre electronically by making use of the internet-based reporting portal provided at http://www.fic.gov.za

(b)must be filed with the Centre electronically by sending an email to complaints@fic.gov.za

11.6 Who is accountable and responsible for the effective management of the anti-money laundering procedures of AFC and ensuring the implementation and ongoing compliance of the RMCP in [Name of FSP].

Name of Money Laundering Officer
Name of Director
Name of External Compliance Officer

REPORTING OF SUSPICIOUS AND UNUSUAL TRANSACTIONS

11.7 Unlawful activity can be described as:

Any conduct, which constitutes a crime or contravention of a law, within the Republic or elsewhere.

(a) True

(b) False

11.8 What constitutes a suspicion?

(a) A suspicion implies an absence of proof that a fact exists. (would lead a reasonable person to believe that a suspect has, is, or will commit a crime.)

(b) It requires hard evidence, and does require more than a hunch.

11.9 What is the Suspicious transaction threshold?

(a) R49 999.99

(b) R25 000.00

11.10 Can an institution continue with a transaction after a report has been made?

Yes, the reporter may continue with and carry out a transaction unless the Centre directs him not to proceed with the transaction.

(a) True

(b) False

11.11 Is the person who reports identity protected

(a) No, the person needs to testify

(b) Yes, the person’s identity will be protected

11.12 What is the time period for reporting?

(a) soon as possible but not longer than 15 days (excluding Saturdays, Sundays and Public Holidays)

(b) soon as possible but not longer than 14 days (excluding Saturdays, Sundays and Public Holidays)

11.13 May you tip-off a client or potential client?

(a) Yes

(b) No

DUTY TO TRAIN

12.1 Who is responsible for providing FICA training?

(a) Name of Money Laundering Control Officer

(b) Name of Director

How often must training be provided to all employees of an FSP?

Annually
Every 2 years
Only initial training is required

Who must receive training?

(a) Name of Money Laundering Control Officer

(b) Name of Director

(d) Representatives

(e) All employees and management

12.4 Why is training important?

(a) To keep the compliance officer happy

(b) Robust and proactive approach to risk reduction and risk mitigation

(c) To create awareness and prepare employees to confidently handle themselves in any relevant situation that could put their job, safety or well-being at risk.

All of the above
b
b, c
- Failure not to provide ongoing training will result in?
Nothing will happen
Subject to an administrative sanction

Choose the correct Option.

(a) The Board of Directors and senior managers with the requisite skill, understanding and oversight of the business and key risks will be tasked with supervising and signing off risk management processes.

(b) The board is also tasked with ensuring the AI and its employees comply with the provisions of the ACT and the RMCP.

(c) The person with the highest authority within the AI must ensure that the Accountable Institution and all its employees comply with the provisions of the Act and the RMCP in so far as they relate to their functions.

(d) All of the above

FICA

13.1 FICA is South Africa’s primary anti-money laundering (ML) and counter-terrorism financing legislation.

a) True (b) False

13.2 FICA aims to ensure that financial institutions know with whom they are doing business.

(a) True (b) False

13.3 FICA does not give the FIC authority over banks, financial institutions, estate agents, brokers and other intermediaries in the financial system operating in South Africa.

(a) True (b) False

13.4 What legislation aim to prevent ML and TF?

(a) FIC (b) POCA (c) POCDATARA (d) FICA

13.5 Who regulates compliance with FICA?

(a) FIC (b) POCA (c) POCDATARA (d) FICA

13.6 Who enforces ML/TF legislation in South Africa?

(a) FIC (b) POCA (c) POCDATARA (d) FICA

Please explain the inherent and residual risks within the company’s RMCP business risk assessment?

TO CONCLUDE

True or False – The Responsibilities of the FICA Compliance Officer is as follows:

Reporting of Cash Threshold Reports, Terrorist Property Reports and Suspicious or Unusual Transactions to the Centre using their online system.
Facilitate the training of all employees regarding the RMCP, Reporting and Recordkeeping duties of the accountable institution;
Maintenance and review of the RMCP and all money laundering related policies and procedure;
Make the Risk Management and Compliance Programme available to all employees;
Client Risk Rating and Source of Fund verification;
Liaising with representatives of the Centre;
Registration and maintenance of the accountable institution’s information on the FIC’s website.

(a) True (b) False

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