Forming the Right Coalitions AJS

And then working towards a common goal…Part I

South Africa’s general elections have ended in an interesting, yet not completely surprising result. 

As we all know by now, the ANC has lost its majority – something it held on to for the last 30 years – having only garnered 40.18% of the final votes. For the first time since the end of apartheid, the ANC will need to make alliances with other parties in order to form a Coalition Government.

·       Wait. What is a Coalition Government?  According to NVDB Attorneys – 

“a Coalition Government is formed when no single party has a majority of seats in the legislature or council.”

And this has sent shock waves through both the political world and financial world as markets await news of which parties the ANC has approached. Global markets wait with bated breath concerned that the ANC could partner with the EFF, a leftist stance communist party, or possibly with the new “rising star” Zuma’s MK Party – that advocates nationalising land and banks and scrapping the constitution- alternatively opting to run a minority government – all options fraught with difficulties and dangers, while, as The Conversation puts it – 

“in an economy that is not in good shape. South Africa has an economy with negative per capita growthhigh and rising unemploymentpoverty and inequality, a government deeply in debt, and 26 million people – 42% of the population – on grants.”

We may have a slight inkling though, if this is anything to go by – 

“The National Working Committee (NWC) of the African National Congress (ANC) has recommended the formation of a government of national unity.

This decision is set to be announced at an ANC press conference on Wednesday and comes as the ANC seeks to address the aftermath of their dismal election performance where the party lost its majority by a significant margin.”

And we sit, wondering who will be running our national government and what will be in store for our beautiful country in the days and weeks to come. 

Will the ANC form a coalition that will be in the best interests of the party or the best interests of the people? Time and patience will tell.

But this got us thinking. Coalitions can also be thought of as working relationships, like partnerships, where two companies work together in order to achieve a common goal. Where two companies work together for the mutual benefit of one another. Where two companies work together to serve a mutual purpose. 

And we have those – amazing synergies with companies with which we work together with in order to serve our clients. Offering products for the mutual benefit of our clients and the products that they use. Coalitions we have entered into for the better.

Working towards a common goal with DocFox

Who is DocFox?

DocFox is an end-to-end software and services solution that enables you to be FULLY FICA compliant. DocFox’s best in class software has been built around the latest Financial Intelligence Centre Act and can be tailored for each client’s specific industry.  What’s more, DocFox’s Know Your Client (KYC) process is not only paperless – clients can take pictures of their documents with their phone and upload them directly into their custom branded online portal – but seamless and automated to boot. 

Why did we partner with DocFox?

The Financial Intelligence Centre Act 38 of 2001 (FICA) as well as the amendments to Schedules 1, 2 and 3 (which came into effect on 19 December 2022) require, amongst other things, the obligation to undertake a KYC exercise. This is especially the case for any financial institution that deals with customers while opening and maintaining financial accounts, but will also include attorneys, trustees and executors, estate agents, trade, and stockbrokers, as well as management companies.

Therefore, to ensure strict compliance with these requirements, AJS has teamed up with DocFox to make the KYC process much easier. The fact that DocFox also happens to be the very best at what they do is an incredibly happy (and mutually beneficial) coincidence. 

Can you give us a recap of the KYC requirements? 

KYC – simply put – involves performing background checks on a client to ensure that they are properly risk assessed before being onboarded. KYC ensures accountable institutions establish and verify the actual identity of their clients before or during the time they do business. 

The main reason KYCs are undertaken is to ensure that clients are not involved in prohibited actions. In fact, the KYC process can be seen as one of the key aspects of FICA as it sets the wheels in motion for all other due diligences.

What does a KYC due diligence include?

KYC controls usually include –

a)         The collection and verification of identity documentation; 

b)         The identification of the nature of the client’s business operations;

c)         The establishment of the identity of its ultimate beneficial owner (being the natural person who ultimately benefits from the client’s assets and profits);

d)         screening against warning lists, client risk assessment and investigations into clients’ financial transactions;

e)         Monitoring and periodically obtaining fresh client information; 

f)           Regularly reviewing certain categories of clients, and 

g)         Reviewing business relationships with foreign prominent public officials and domestic prominent influential persons.

FICA extends the list of persons and institutions with whom the Financial Intelligence Centre will share information – especially noteworthy is the inclusion of the supervisory bodies and the Public Protector.

Undertaking the KYC requirements

While we cannot make FICA obligations go away entirely, we do offer some sound solutions that can make the somewhat heinous requirements much easier to deal with. 

For starters, the KYC status is colour-coded on the Quick View and, depending on your preferred levels of control, actions such as posting fees or invoicing can be prevented if a matter is non-compliant. The DocFox integration ensures that your KYC status is up to date.

AND REMEMBER the CONSEQUENCES if there is non-compliance with FICA!

According to DocFox – 

“The penalties for non-compliance vary depending on the severity of the offence but can range from a public reprimand to a financial penalty or even jail time. These penalties apply not only to the company itself but may also apply to the executives or owners of a business as well as employees or individuals involved in dealings with a specific client, transaction, or activity.

The Financial Intelligence Centre (FIC) specifically states that non-compliance with the FIC Act could lead to:

  • A public reprimand.
  • A remediation directive.
  • The restriction or suspension of certain business activities.
  • Financial penalty of up to R10 million for a natural person or up to R50 million for a legal person.
  • For more serious offences, the maximum penalty increases to imprisonment for a period of up to 15 years or a fine of up to R100 million”.

Increase compliance and reduce both the time and resources needed by looking into automating your KYC process and ensure that you are – and remain – FICA compliant with AJS and DocFox.

We are sure you will agree that AJS offers something that’s more than just software…. We offer the whole package. 

The best legal tech software solutions that money can buy – at prices that you can afford. All according to your own individual needs and wants. We offer outstanding customer support – always there when you need us. 

Get-in-touch with us and let’s see how we can take your software solution from good to phenomenal. Also, if you don’t yet have any software supporting your legal practice, fret not. We are here to help you from scratch too. 

(Sources used and to whom we owe thanks: The Conversation; NVDB Attorneys; LexisNexis).

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