We have previously written an article about South Africa's recent grey listing by the Financial Action Task Force ("FATF"). Given the greylisting, it will now be crucial for the Financial Intelligence Centre ("FIC") to ensure that it can demonstrate to the FATF that its adverse findings have been remedied and to take all steps necessary to ensure that South Africa is removed from the grey list as soon as possible. It is therefore expected that the FIC will closely monitor compliance with the Financial Intelligence Centre Act, 2001 ("FICA") by the new categories of accountable institutions added to Schedule 1 in FICA at the end of November 2022 and which came into effect late last year.
New accountable institutions include credit providers and businesses dealing in high-value goods in respect of any transaction where such a business receives payment in any form to the value of ZAR100 000 or more (including dealers in motor vehicles, scrap metal, art, equipment, rare game and mines).
In terms of FICA, every accountable institution referred to in Schedule 1 to FICA must, this week, register online with the FIC. To do so, a compliance officer must be appointed.
The obligations imposed on accountable institutions (such as implementing a risk management and compliance programme) have already commenced and there is no grace period for compliance.
Non-compliance with FICA can lead to hefty penalties, including imprisonment for a period not exceeding 15 years or to a fine not exceeding ZAR100-million.
Registration of new accountable institutions in South Africa is a crucial step towards remedying the country's adverse findings by the FATF and getting off the grey list as soon as possible. It is therefore essential for organisations to fast-track their compliance efforts, and resources such as ENSafrica's FICA toolkit and workshop can be helpful in this regard. Now more than ever, it is a critical time for businesses to prioritise compliance with FICA to avoid any legal consequences and maintain their reputation.
To learn more about our FICA toolkit and to take part in the 2-hour FICA workshop we will be hosting on 8 March 2023, register here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.