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.
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.
DocFox, FICA Compliance Experts, offer end-to-end software that ensures that your firm’s FICA policies are implemented right the first time. Read more here about the DocFox software and how you can easily become (and remain) FICA compliant within days.