Guidance Note 8: On the Directive for Conduct within the National Payment System in respect of the Financial Action Task Force Recommendations for Electronic Funds Transfers (Directive 1 of 2022)
Definitions
“The Centre” means the Financial Intelligence Centre established in terms of section 2 of the FIC Act.“Cover payment” refers to an electronic funds transfer that combines a payment message sent directly by the ordering financial institution to the beneficiary financial institution with the routing of the funding instruction (the cover) from the ordering financial institution to the beneficiary financial institution through one or more intermediary financial institutions.“Directive 1 of 2022” refers to the Directive for conduct within the National Payment System in respect of the Financial Action Task Force recommendations for electronic funds transfers, made in terms of section 43A(2) of the FIC Act as issued by the SARB and published in Government Notice 47019 of 15 July 2022. Reference to “the Directive” has the same meaning.“Electronic funds transfer” as defined in the Directive 1 of 2022, has the same meaning as the term “wire transfer” as per FATF recommendation 16 and interpretative notes thereto.“FATF” refers to the Financial Action Task Force.“FIC Act” refers to the Financial Intelligence Centre Act, 2001 (Act 38 of 2001)“Interpretive Notes on Recommendation 16” refers to the additional information provided by the FATF in the interpretation of Recommendation 16. See https://www.fatfgafi.org/media/fatf/documents/recommendations/pdfs/FATF%20Recommendations%202012.pdf“MLTFC Regulations” refer to the Money Laundering and Terrorist Financing Control Regulations, 2002, made in terms of section 77 of the FIC Act and published in Government Notice 1595 in Government Gazette 24176 of 20 December 2002, as amended by Government Notice R456 in Government Gazette 27580 of 20 May 2005 and Government Notice R867 in Government Gazette 33596 of 01 October 2010 and Government Notice 1107 in Government Gazette 33781 of 26 November 2010 and Government notice 1062 in Government Gazette 41154 of 29 September 2017.“Payment message’ is a general term used in this Guidance Note to indicate the prescribed information to flow with the electronic funds transfer as set out in Directive 1 of 2022.“Recommendation 16” refers to the recommendation regarding wire transfers as issued by the FATF. See https://www.fatfgafi.org/media/fatf/documents/recommendations/pdfs/FATF%20Recommendations%202012.pdf“Serial payment” refers to a direct sequential chain of payment where the electronic funds transfer and accompanying payment message travel together from the ordering financial institution to the beneficiary financial institution directly or through one or more intermediary financial institutions (e.g. correspondent banks)Where a term is not defined in this Guidance Note, the definition as provided in the South African Reserve Bank FATF electronic funds transfer Directive 1 of 2022 and FIC Act applies.Verifying the accuracy of client information
Threshold amount relating to ‘verify for accuracy’ and related CDD application
Example 1: Cross-border electronic funds transfer below the R10 000.00 threshold set in Directive 1 of 2022 with no business relationship:
Client X requests that Bank S in South Africa, transfers an amount of R9 900, 00 via an electronic funds transfer to Mr K in Zimbabwe. Client X does not have an arrangement with Bank S for the purpose of concluding transactions on a regular basis. The transaction does not exceed the threshold amount in Directive 1 of 2022 and therefore the requirement to verify the information in the payment message for accuracy does not apply unless the electronic fund transfer is covered in paragraph 4.8 or 4.9 of the Directive (i.e. a suspicious transaction or funds from a high-risk jurisdiction).Bank S must include the required information in the electronic funds transfer payment message for Client X, in doing so, Bank S has complied with Directive 1 of 2022.Bank S must conduct CDD on the client in terms of the FIC Act, as the single transaction is more than R5 000.00 as prescribed in terms of regulation 1A of the MLTFC Regulations. Bank S should capture this verified information obtained in the CDD process in the payment message given that it is available to them.Example 2: Cross-border electronic funds transfer transaction above the R10 000,00 threshold set in Directive 1 of 2022 with no business relationship
Client Z requests that Bank X in South Africa transfers an amount of R10 001,00 via an electronic funds transfer to Mr J’s bank account in Angola.Client Z does not have an arrangement with Bank X for the purpose of concluding transactions on a regular basis. However, the transaction value exceeds the threshold set in Directive 1 of 2022 and meets the definition of a single transaction in terms of the FIC Act.Bank X must therefore verify the information of Client Z in accordance with the requirements as set out in the FIC Act and Bank X’s RMCP. Bank X must ensure that the required and accurate information relating to Client Z and required information relating to Mr J as prescribed in Directive 1 of 2022 is included in the cross border electronic funds transfer.Example 3: Cross-border electronic funds transfer below the R10 000,00 threshold set in Directive 1 of 2022 and below the CDD verification threshold of R5 000,00 in terms of the FIC Act. No business relationship and a payment from a highrisk country:
Mr P receives an electronic funds payment to the value of R4 900, 00 from Mr O in Syria. Mr P does not have an arrangement with accountable institution F for the purpose of concluding transactions on a regular basis. The transaction does not exceed the threshold amount for a single cross-border payments transaction set in Directive 1 of 2022, nor does it meet the single transaction threshold in terms of the FIC Act, requiring a CDD obligation. However, the electronic fund transfer is processed (coming) from a high-risk country as determined by the accountable institution F.Therefore, accountable institution F must verify the accuracy of Mr P’s information as the beneficiary. The same would apply if there was a suspicion of money laundering and/or terrorist financing.Example 4: Cross-border electronic funds transfer transaction below the R10 000,00 threshold set in Directive 1 of 2022 within a business relationship:
Client B in South Africa, makes an electronic funds transfer amounting to R9 900.00 from his bank account at Bank H in South Africa, to Mr T in the Kingdom of Eswatini on a regular basis. Bank H must ensure that the required and accurate information relating to Client B and required information relating to Mr T as prescribed in Directive 1 of 2022 is included in the cross-border electronic funds transfer. Bank H must conduct CDD on Client B in compliance with the requirements as set out in the FIC Act and its RMCP when establishing a business relationship. It is not required that Bank H re-verifies Client B for each subsequent electronic funds transfer processed, unless part of ongoing monitoring or where Bank H doubts the veracity of information provided by Client B.Record keeping of information pertaining to the electronic funds transfer
Unique customer identifier
Capturing of an identification number or passport number
Scrutinising payments and electronic funds transfers to identify sanctions
Cited documents 4
Legislation 4
1. | Prevention of Organised Crime Act, 1998 | 946 citations |
2. | Financial Intelligence Centre Act, 2001 | 727 citations |
3. | Copyright Act, 1978 | 167 citations |
4. | Protection of Constitutional Democracy against Terrorist and Related Activities Act, 2004 | 136 citations |