The Financial Intelligence Centre ("FIC") has issued a warning to new accountable institutions regarding compliance with the Financial Intelligence Centre Act, 2001 ("FICA"). The FIC has stressed the importance of timely registration and the potential administrative sanctions for non-compliance.On 20 March 2023, Christopher Malan, Executive Manager for Compliance and Prevention at the FIC, issued a letter to the new accountable institutions in terms of the FICA.
Mr Malan warns that the 90-day non-penalty window for various new and other identified accountable institutions to register with the FIC closed at end of business on Monday, 20 March 2023.
Amendments to Schedule 1 to FICA came into effect on 19 December 2022. Accountable institutions that have not yet registered with the FIC in respect of all the items in which they conduct business, are currently non-compliant with FICA and are required to immediately register with the FIC to avoid attracting increasing administration sanctions for non-compliance and late registration.
It is our view that the 90-day period expired before 20 March 2023. This is because every accountable institution referred to in Schedule 1 to FICA must, within the prescribed period and in the prescribed manner, register with the FIC. The prescribed period and manner for registration are set out in regulation 27A of the FICA Regulations. In terms of this provision, any person or category of persons added to the list in Schedule 1 of FICA after the commencement of this regulation must register with the FIC within 90 days after the amended Schedule 1 is published by notice in the Government Gazette on 29 November 2022, as opposed to the amendments becoming effective on 19 December 2022.
Be that as it may, it is clear that the 90-day period has now lapsed and accountable institutions should register as a matter of urgency to avoid the imposition of sanctions.
Any accountable institution that fails to register with the FIC is non-compliant and is subject to an administrative sanction. The FIC may impose any one or more of the following administrative sanctions:
- a caution not to repeat the conduct which led to the noncompliance:
- a reprimand?
- a directive to take remedial action or to make specific arrangements?
- the restriction or suspension of certain specified business activities? and
- a financial penalty not exceeding ZAR10 million in respect of natural persons and ZAR50 million in respect of any legal person.
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