Exemption 5 of the Exemptions deals with countries situated in a foreign jurisdiction. According to Exemption 5 accountable institutions, including banks, are exempted from compliance with the provisions of section 21 of the FIC Act that require the verification of the identity of a client of that institution, if:

The country in which the client is situated has to have anti-money laundering regulation and supervision of compliance with such antimony laundering regulation in force. All FATF member countries are deemed to have adequate anti-money laundering legislation and supervision of compliance with such legislation in place.

If a country is not a FATF member country, more careful scrutiny of the anti-money laundering/combating of terrorist financing systems in that country should be undertaken to establish whether the requirements applicable to a specific institution are equivalent to the requirements of the South African legislation. If this is not the case, this exemption does not apply, and the entity has to be identified and verified as stipulated in the FIC Act and the Regulations.