Page 39 - Q&A Book.indd

Although it might not seem so, a capital loss is an asset to your company
as it will allow your company to set-off future capital gains against such
loss. You can realise a future capital gain in your company to the full
value of your current capital loss before your company becomes liable
to pay any further income tax on the capital gain. A capital loss is also
capable of being carried over from one year to the next, and put you
in a position to turn your current loss into a future gain.

New FICA requirements for accountable
institutions Commercial
Damian Viviers
May 2017

“My business qualifies as an accountable institution under the
Financial Intelligence Centre Act. There has been a lot of talk
in the news about the new Amendment Act being signed but
not a lot of detail on how it will affect my business. Will it be
business as usual or are there changes I should be aware of?”

The Financial Intelligence Centre Act 38 of 2001 (“FICA”) was introduced
in South Africa to govern financial intelligence and to assist in the
combatting of financial crime. The recent Amendment Act to FICA is
intended to enhance and modernise our South African framework in
accordance with the latest approaches of the international community.
All entities classified as “accountable institutions” in terms of FICA must
comply with FICA, which includes the latest amendments thereto.

The key amendment introduced is a shift from a rules-based approach
to a risk-based approach in ensuring FICA compliance, which simply
means that accountable institutions must consider the potential risk
involved with establishing a business relationship or concluding a
single transaction with a particular client.
Accountable institutions are obliged to conduct “client due diligence”
(“CDD”) to establish and verify the identities of their clients. Essentially
you are required to know who your client is with whom you are doing
business. The Amendment Act now imposes enhanced measures
relating to ongoing CDD and the monitoring of business relationships,
as well as obligations in respect of prominent and influential persons.
The Amendment Act also introduces additional due diligence
measures relating to legal persons, trusts and partnerships. Client
due diligence processes will therefore need to be reviewed by every
accountable institution.

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