Financial Intelligence Centre Act (FICA) amendments

Introduction & Background

The Financial Action Task Force (FATF) is an independent inter- governmental body that promotes policies and standards for combating money laundering, terrorist financing, and the financing of the proliferation of weapons of mass destruction. South Africa has been a member of the FATF since June 2003.

South Africa was subject to a mutual evaluation of its AML system by the FATF between April 2019 and June 2021 and the FATF concluded that South Africa “has a solid legal framework for combatting money laundering and terrorist financing, but significant shortcomings remain”.

The Financial Intelligence Centre (FIC) has amended the Financial Intelligence Centre Act, 38 of 2001 and its related schedules.

It is anticipated that the increased sectoral coverage will reduce money laundering combat the financing of terrorism and increase financing supervision and monitoring, thereby addressing the weaknesses identified by the Financial Action Task Force in its evaluation of South Africa.

Recent Amendments

  • Schedule 1 – List of accountable institutions has been amended to include new categories of businesses.
  • Schedule 2 – List of supervisory bodies has been
  • Schedule 3 – All reporting institutions listed have been

New sectors or business activities have been added under Schedule 1 and these sectors will also need to comply with the requirements of FICA. The following entities are now included in Schedule 1 and are deemed to be accountable institutions:

  • Credit Providers
  • Advocates that practise with a fidelity fund certificate
  • Money or value transfer Providers
  • Trust and Company Service Providers
  • Co-operative Banks
  • High Value Goods Dealers
  • The South African Mint Company
  • Crypto Asset Service Providers
  • Payment clearing service operators

Significance of the recent amendments

The amendments made to FICA include trust and company service providers and the new categories of businesses included in Schedule 1 of FICA are required to fulfil the following FIC regulatory requirements:

  • Register with the FIC
  • Appoint an Anti Money-Laundering (AML) / Combating the Financing of Terrorism (CFT) Compliance Officer
  • Submit regulatory reports to the FIC
  • Implement a risk-based approach to customer due diligence
  • Develop a risk management and compliance program (RMCP)
  • Perform Customer due diligence
  • Record-keeping controls
  • Targeted financial sanctions controls aimed at terrorist financing
  • Targeted financial sanctions controls aimed at proliferation financing (section 26A, 26B and 26C of the FIC Act)
  • Prominent influential person controls
  • Implement a compliance function and appoint a person responsible for compliance
  • Train employees on how to comply with the FIC Act

Consequences of Non-Compliance with FICA

Non-compliance with FICA may lead to imprisonment for up to 15 years or fines up to R100 million.

Mea Malan