Consequences of non-compliance for all accountable institutions

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Christopher Malan | Head | Compliance and Prevention | Financial Intelligence Centre (FIC) | mail me | 


The Financial Intelligence Centre (FIC) brings to the attention of all accountable institutions, important information regarding penalties and administrative sanctions for non-compliance.

This information applies also to those institutions included on Schedule 1 of the Financial Intelligence Centre Act 2001 (Act 38 of 2001) since December 2022.

The administrative sanctions that the FIC may impose in terms of section 45C (3) of the Financial Intelligence Centre Act (FICA) for non-compliance with the FICA is any one or more of the following sanctions:

  • A caution not to repeat the conduct which led to the non­-compliance,
  • A reprimand,
  • A directive to take remedial action or to make specific arrangements,
  • The restriction or suspension of certain specified business activities; or
  • A financial penalty not exceeding R10 million in respect of natural persons and R50 million in respect of any legal person.

The FIC emphasises that it is neither a court of law nor an enforcement agency and may not order imprisonment of individuals. Also, administrative sanctions are not of a criminal nature. Some non-compliance issues could also be criminal offences and may be pursued by law enforcement and may result in criminal prosecution and imprisonment and/or a fine.

The FIC may refer matters to the South African Police Service, the National Prosecuting Authority or other enforcement agencies for criminal investigation and prosecution. However, criminal investigation and prosecution is not within the mandate of the FIC, which enforces compliance with the FIC Act through administrative sanctions and not criminal prosecution.

The FIC strongly urges all accountable institutions including new items in Schedule 1 to FICA, to ensure that they are now registered with the FIC, as the timeline for their registration ended on 20 March 2023.

Accountable institutions are required to ensure they have complied with any directive issued by the FIC, including Directive 7, which required the online submission of a risk and compliance return to the FIC by Monday, 31 July 2023.

Also, accountable institutions are required to provide a copy of their Risk and Compliance Management Programme to the FIC, upon request by the FIC, in a timely manner.

The FIC refers affected accountable institutions to the FIC Final Notice of 22 November 2023, of the intent of the FIC to issue administrative sanctions, which includes the following caution:

“This notice cautions the accountable institutions mentioned above, who have not registered with the FIC, and/or those who have not submitted their risk and compliance return, to register with the FIC and then to submit the outstanding risk and compliance returns by no later than 17H00 on Friday, 1 December 2023, failing which they remain in a state of non-compliance and will be liable to be sanctioned with an administrative sanction (which may include a financial penalty).”

The FIC Final Notice of 22 November 2023, of its intent to issue administrative sanctions may be accessed here.


 



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