The Financial Investigation Agency (FIA) plays a vital role in ensuring compliance with laws designed to combat money laundering, terrorist financing, and proliferation financing. Recent legislative updates provide a detailed framework for the FIA’s powers, responsibilities and the obligations of Designated Non-Financial Businesses and Professions (DNFBPs) and Non-Profit Organisations (NPOs).

Here is an overview:

Under Section 5M, FIA is empowered to:

• Inspect premises and systems: FIA can examine procedures, systems, and controls of DNFBPs and NPOs, whether within or outside the Territory.
• Review assets and documents: Inspections include the ability to assess assets and make copies of documents related to the operations of DNFBPs or NPOs.
• Request information and explanations: Officers, employees, and representatives of DNFBPs and NPOs must provide FIA with necessary information, either verbally or in writing, during any stage of the inspection process.

Inspections may be conducted for:

• Monitoring compliance: Ensuring adherence to anti-money laundering, counter-terrorism financing, and proliferation financing laws, regulations, and guidelines.
• Investigative support: Assisting in inquiries into matters under FIA’s jurisdiction or supporting domestic and international investigations.

• Notification protocols: FIA typically provides reasonable notice before an inspection. However, it may conduct unannounced inspections when circumstances warrant.
• Collaborative oversight: Domestic competent authorities or foreign financial investigation agencies may participate in inspections if their involvement is necessary and does not compromise confidentiality.

Inspection reports are strictly confidential and shared only:

• Internally: With DNFBPs or NPOs for compliance purposes.
• Externally: With approved parties, including foreign financial investigation agencies or law enforcement, when necessary.

Unauthorised disclosure of these reports can lead to significant penalties, including fines.

The frequency of inspections depends on:

• The risk profile of the DNFBP or NPO.
• Trends or typologies in financial crime.
• FIA’s assessment of the entity’s compliance culture, controls, and operational changes.

FIA may also conduct reviews whenever concerns arise about a DNFBP or NPO’s operations or risk management practices.

Entities under FIA’s supervision must:

• Fully cooperate with inspections by providing accurate information, documents, and materials.
• Ensure compliance with anti-money laundering regulations, including preparing and submitting risk assessments.
• Adhere to directives issued by FIA, with failure to comply resulting in penalties.

The recent updates also amend Schedule 1 of the principal Act, extending the applicability of certain provisions to DNFBPs and NPOs, thereby aligning their obligations with those of financial institutions.

DNFBPs and NPOs are encouraged to maintain strong compliance systems and engage proactively with regulatory authorities to meet these obligations effectively.

The Financial Investigation Agency (Amendment) Act, 2024 can be found here.