The Financial Intelligence Centre Amendment Act 1 of 2017 (FICA) is worlds away from a simple add-on to your existing business procedures as it requires well thought out documented processes and procedures to a risk-based approach.
To become, and remain, FICA compliant Accountable Institutions (AI’s) should build the FIC Act into their company’s strategy as well as normal business routine to avoid non-compliance.
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.
FICA Non-Compliance Penalties
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.
As stated in the FIC 2019/2020 report, the FIC and supervisory bodies issued a total of 37 sanctions with a total financial penalty of R77 376 738.67. Even more recently, the Legal Practice council sent out a notice stating, “The FIC conducted 207 compliance Inspections and 9 compliance onsite reviews covering the period 1 April 2020 – 31 March 2021 to assess the level of compliance by legal practitioners supervised in terms of the MOU and FIC Act.4.”
According to this notice, of the 207 inspections approximately 80% of the legal practitioners were found non-compliant. The Legal Practice Council pointed out that the most common non-compliance related to:
-
Failure to register with the FIC.
-
Failure to have a Risk Management and Compliance Programme.
-
Failure to conduct Customer Due Diligence.
-
Failure to report.
With DocFox as your FICA compliance partner, fulfilling your FICA requirements is simple and gives you peace of mind to confidently face a FIC inspection. Whether you need assistance in getting compliant fast or if you’re just not sure where to start, we can assist.
