WHY LOCATION JUST BECAME A KEY FICA PRIORITY- W360 and SearchWorks
- Business Sense
- 1 day ago
- 3 min read
Updated: 8 minutes ago
At the end of last year, the Financial Intelligence Centre (FIC) released draft Directive 10 for public comment. The directive emphasises stronger geographic location disclosures by accountable institutions at the point of registration. Under the directive, accountable institutions must share information about their head offices, branches, and subsidiaries, including the branches of their subsidiaries. T his relates to offices and branches located within or outside the Republic of South Africa.
While geographic location has always been a foundational element of anti–money laundering and counter-terrorist f inancing (AML/CFT), this recent directive from FIC highlights the importance of transparency. At the centre of the draft directive is a deceptively simple idea: regulators need a clearer view of where accountable institutions operate and of how they are geographically structured. This is vital in a financial system increasingly shaped by cross border activity, complex corporate structures, and distributed operations.
Location, location, location
Geographic location plays a central role in how financial institutions assess risk, apply due diligence, and meet regulatory obligations under FICA.
For example, some locations are seen as riskier because it’s easier for money to move across borders without being noticed, there’s more organised crime, or governance and compliance rules aren’t enforced very well. In this way, geographic location can be a critical risk signal. For instance, a small port town with limited customs checks might be more vulnerable to money laundering than a big city with strict financial regulations. FICA also expects accountable institutions to understand their customers’ geographic footprint so that they can apply appropriate levels of customer due diligence.
Geographic data also affects ongoing monitoring because customers that operate across borders require enhanced scrutiny. If a business is constantly moving money between countries with different regulatory frameworks, this should trigger additional checks. But without accurate and up to-date location information, institutions can miss unusual patterns that might indicate illicit activity. In a recent interview with Moneyweb, acting director of the FIC, Pieter Smit, explained that even after exiting the grey list last year, it is essential for South Africa to continuously strengthen the effectiveness of its AML/ CFT frameworks.
He stressed that this must be an ongoing process, rather than a once-off fix. According to Smit, the geographic location and the structure in which accountable institutions operate can either increase or decrease the risk of being exploited by criminals, which is why it’s so important.
Where to from here?
Stakeholders are invited to submit comments on Directive 10 by the close of business on Friday, 13 February 2026.
Should the directive come into force, accountable institutions must update their registration details within 90 days of the commencement date. This would mean gathering accurate location data for head offices and all branches and subsidiaries across jurisdictions. Obviously, if a company has hundreds of branches and subsidiaries, this process will be more complicated. But, once the records are updated, it’s just a matter of maintaining and updating the information should anything change in the future.
Automated compliance tools and applications, like VOCA from SW360, streamline FIC compliance in a clear, practical way. If, for example, you have a customer and all their checks are clear, but they suddenly start receiving large payments routed through banks in a jurisdiction flagged for weak AML controls, this activity warrants further investigation.
Ongoing monitoring tools keep tabs on sanctions lists and Politically Exposed Persons (PEPs) and will flag this unusual activity. As an accountable institution, you can then investigate, update the client’s risk rating, and file any required FIC reports. Should Directive 10 come into force, it might mean more paperwork for accountable institutions, but it also makes it easier to detect, assess, and act on risks before it’s too late.
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