By Moonstone Information Refinery

The Financial Intelligence Centre (FIC) has issued a directive that requires all accountable institutions to screen prospective and current employees, as well as to check whether prospective and current employees have been sanctioned by the United Nations.

Directive 8 was published in the Government Gazette on 31 March, and it came into effect on that date.

In terms of the directive, accountable institutions periodically must screen current and prospective employees for competence and integrity, in a risk-based manner, to identify, assess, monitor, mitigate and manage the risk of money laundering, terrorist financing and proliferation financing. The practical considerations of this are considered below :

Screening for competence : employment history, qualifications and relevant accreditations

Screening for integrity : this include determining whether the employee does not have a criminal record, particularly
related to crimes of dishonesty, money laundering or other financial crime

Screening against the Targeted Financial Sanctions List: must scrutinise all current employees against the TFS list as and when updates are made to the TFS list

An accountable institution must scrutinise information concerning its prospective and current employees upon being notified by the director of the FIC under section 26A(3) of the Financial Intelligence Centre Act (Fica), to determine whether any such person is mentioned in the notice.

Section 26A refers to the financial sanctions that members of the UN must impose on persons and entities upon the adoption of a resolution by the UN Security Council. The Minister of Finance is required to announce the adoption of the resolution, whereafter the director of the FIC must give notice of the persons and entities identified by the Security Council.

An accountable institution must provide for in its Risk and Compliance Management Programme, and record, how it will screen employees for competence and integrity and how it will scrutinise employee information against the targeted financial sanctions lists, the directive says.

The records relating to both the manner and outcomes of the screening and scrutinising of employee information must, on request, be made available to the FIC or a supervisory body.

The FIC has issued Public Compliance Communication 55 to provide guidance to accountable institutions on how to apply Directive 8.