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KYC Deadline For South African Banks Extended

by Robert Lee, for LawAndTax-News.com, London

22 June 2004


South African Finance Minister, Trevor Manuel on Thursday announced that the deadline for banks to reidentify their customers for 'Know Your Customer' (KYC) purposes has been extended.

Under the 2001 Financial Intelligence Centre Act 38, banks and other "accountable" institutions, such as casinos, law firms, and estate agencies, were, from June 30 2003, obliged to verify the identity and residence of new clients before proceeding with transactions.

The affected institutions were also obliged to provide such data for their existing clients, but were initially given until the end of this month to do so. The law stipulates that should the banks not receive the necessary information from their customers, they must freeze the 'questionable' accounts until such time as verification of the account holder's identity is obtained.

Responding to protests from many of the country's banks, which argued that they were likely to miss the deadline due to difficulties in obtaining the necessary proofs of identification and residence from their poorest clients, Mr Manuel last week unveiled three new deadlines.

The Finance Minister explained that customers designated as high risk must be identified by December 31, 2004, medium risk customers by September 30, 2005, and low risk customers by September 30, 2006.

According to reports in the South African media, Mr Manuel was careful to stress that the extension of the deadline was "no admission" that the original demands made by the government were too strict.


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