Financial Institutions, Law Firms, Estate Agents and other Accountable Institutions operating in South Africa must vet all employees for competence and integrity, or risk sanction, including a fine of up to R50m.

Additionally, accountable institutions are obliged to record how the screening has been conducted and must keep records of the outcome of such screening. These records must be made available to the Financial Intelligence Centre (FIC) upon request.

In Public Compliance Communication 55 (PCC 55), the FIC advised the public on mechanisms to abide by Directive 8. Such mechanisms include:

Competence

Screening for competence must entail determining whether an employee has the necessary skills, knowledge and expertise to perform their function effectively and includes scrutinizing, amongst other information, the employee’s previous employment history, employment references, qualifications and relevant accreditations.

Integrity

Screening for integrity involves scrutinizing the morality and integrity of the employee, which may include considering criminal records (with a particular emphasis on crimes involving an element of dishonesty) and financial crimes.

Sanctions and penalties

Accountable institutions that fail to uphold the directive may be subject to administrative sanctions in terms of Section 45C of FICA. These sanctions vary and could take the form of a caution, reprimand, directive to take remedial action, restriction on business activities or financial penalty not exceeding R10m.

Other legislative considerations

When conducting such screenings, employers must abide by the provisions of the Protection of Personal Information Act, evaluations of security measures to store personal data, mandatory notifications and obtaining of consent.

Let AF-Consulting assist you! We provide services that include: Reference Checks, Criminal & Credit Checks, Qualification Checks and more.

Send your request email to info@af-consulting.co.za or contact us on 087 135 0780.