{"id":8871,"date":"2024-03-01T11:44:23","date_gmt":"2024-03-01T09:44:23","guid":{"rendered":"https:\/\/datanamixdev.wpengine.com\/media\/?p=8871"},"modified":"2024-03-18T09:54:08","modified_gmt":"2024-03-18T07:54:08","slug":"navigating-the-latest-fica-frontier-fic-directive-8-employee-screening","status":"publish","type":"post","link":"https:\/\/www.datanamix.com\/media\/2024\/03\/01\/navigating-the-latest-fica-frontier-fic-directive-8-employee-screening\/","title":{"rendered":"Navigating the Latest FICA Frontier: FIC Directive 8 – Employee Screening\u00a0\u00a0"},"content":{"rendered":"\n

Directive 8 aims to ensure that companies check the skills and honesty of both potential and current employees. It also requires screening employee details against financial sanctions lists to prevent money laundering, terrorist financing, and proliferation financing risks.\u00a0<\/p>\n\n\n\n

So, as a business, what do you need to know?<\/strong>\u00a0<\/p>\n\n\n\n

Take a Risk-based Approach:\u00a0\u00a0<\/h2>\n\n\n\n

Whilst all employees must be subject to scrutiny, not all employees present the same level of Money Laundering (ML) \/ Terrorist Financing (TF) \/ Proliferation Financing (PF) risk. An accountable Institution must determine the level of risk an employee role poses and ensure that the screening applied is proportionate. \u00a0
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As such, where the Company identifies a higher risk of ML\/TF\/PF based upon the employee role, the Company should apply more stringent competency and integrity screening and seek to mitigate any identified risk.\u00a0
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The Company asserts to identify and verify employees and collect information and evidence of sufficient quantity and quality to be able to assess the potential level of ML\/TF\/PF risk presented.\u00a0<\/p>\n\n\n\n

The new FICA requirements\u00a0<\/h2>\n\n\n\n

With the FIC Act comes a new set of requirements that all accountable institutions need to adhere to.\u00a0<\/p>\n\n\n\n

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  1.  Prospective and current employees are screened for competence and integrity before their appointment and on an ongoing basis in a risk-based manner. <\/li>\n\n\n\n
  2. Prospective employees and current employees’ information is scrutinised against the targeted financial sanctions (TFS) list to identify, assess, monitor, mitigate, and manage the risk of money laundering (ML), terrorist financing (TF), and proliferation financing (PF). <\/li>\n\n\n\n
  3. The institution must provide for how both types of screening will be conducted and record it in the institution’s Risk Management and Compliance Programme<\/a> (RMCP). <\/li>\n\n\n\n
  4. Records of the outcome of both types of screening must be kept. <\/li>\n\n\n\n
  5.  The FIC or other supervisory bodies can request the institution to provide the records relating to the manner and outcomes of both types of screening. <\/li>\n\n\n\n
  6. \u00a0Public Compliance Communication 55 guides how to comply with these requirements and supports Directive 8.\u00a0<\/li>\n<\/ol>\n\n\n\n

    So, when and how often should this be done?<\/strong>\u00a0<\/p>\n\n\n\n

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    1. Before hiring, the company must screen all potential employees for their skills and honesty. <\/li>\n\n\n\n
    2. Directive 8 suggests that screening employee information should happen at the onboarding stage and reviewed regularly according to the company’s RMCP.\u00a0\u00a0<\/li>\n\n\n\n
    3. As per your RMCP, you should check employees in higher-risk roles more often than those in medium or lower-risk roles when screening them.<\/li>\n\n\n\n
    4. According to FIC, if an employee’s role poses a high ML\/TF\/PF risk, the company should conduct competency and integrity checks annually at least. <\/li>\n\n\n\n
    5. The company might screen low-risk employees every five years, medium-risk employees every three years, and high-risk employees annually.<\/li>\n<\/ol>\n\n\n\n

      How do we assist with Directive 8 compliance?<\/h2>\n\n\n\n

      At Datanamix, we understand the difficulties that come with constant changes in regulations and laws that your company needs to adhere to.\u00a0 As a registered Credit Bureau and specialists in FICA and KYC, we are here to assist and support you on your compliance journey.\u00a0\u00a0<\/p>\n\n\n\n