The Financial Intelligence Centre has begun issuing fines to South African businesses who remain non-compliant with FICA.
As reported by News24, the FIC recently issued a R7.7 million fine to an unnamed law firm in South Africa as punishment for its continued non-compliance with FICA.
The law firm faced an additional R50,000 fine as punishment for failing to submit its Risk and Compliance Return (RCR).
This is far from the only fine that has been issued. The FIC claims to have also issued fines to 202 other businesses that remain uncompliant.
The clampdown on FICA non-compliance by the FIC comes as South Africa battles to address serious deficiencies in its Anti-Money Laundering (AML) laws. Addressing these deficiencies by ensuring that businesses across South Africa have the necessary AML systems in place is essential to get South Africa removed from the FATF’s greylist, the effects of which are costing the country’s economy billions of Rands and suppressing growth.
SA’s Widespread Non-Compliance Crisis
Despite the FIC having worked for years to ensure widespread FICA compliance in South Africa, many industries still remain uncompliant months after the key deadlines have passed.
The deadline for the submission of the Directive 6 RCR was the 31st of May 2024, while the Directive 7 deadline was July 31st. According to the FIC, the average RCR submission for Directive 6 sits at a disappointing 63%.
- Legal Practitioners: 60%
- Estate Agents: 66%
- Trust Service Providers: 74%
- Company Service Providers: 76%
- Casinos: 100%
Real estate agents and law firms are the least compliant industries in South Africa. At the Tax Indaba held in Cape Town, it emerged that many real estate agents and law firms were largely unconcerned with FICA compliance.
This lack of concern is worrying and dangerous. Not only does non-compliance put South Africa at risk of failing to remove itself from the FATF’s greylist, but non-compliant firms are also at risk of being fined millions of Rands.
A Price Too Big to Pay – The Massive Fines for FICA Non-Compliance
The fines for FICA non-compliance are massive. The FIC is allowed to issue a wide range of fines to both individuals and legal entities, which can be as high as:
- R10 million for individuals (CEOs and compliance officers)
- R50 million for legal entities (e.g., businesses and trusts)
It is widely expected that the FIC will begin imposing larger and larger fines in order to force widespread FICA across South Africa. The publication of this R7.7 million Rand fine represents the FIC making an example of one such case and is a sign of the thousands of fines that will inevitably be issued if businesses fail to become FICA compliant themselves.
When FICA compliance is so easy to achieve, it is not worth putting yourself and your business at risk of fines worth millions of Rands.
FICA Compliance Services for Real Estate Agents and Law Firms
ThisIsMe offers a comprehensive range of products and services that are perfectly designed to help your business meet its FICA compliance obligations.
The following three services are perfect for real estate agents and law firms:
- ID Check: Verify a South African ID number and get essential information for FICA compliance.
- AML Risk Screening: Screen an individual for PEP, DPIP and FPPO status, their presence on international watchlist and sanctions databases, and more.
- FICA Express: Our leading new service combines an ID check and AML Risk Screening into a one-click service that perfectly meets your FICA compliance needs for only R9.95 per customer.
To experience our software in action and see how it can address your business’s FICA compliance challenges, simply schedule a demo here.
