The last twelve months have seen a flurry of FICA compliance fines dished out across various South African industries. The Financial Intelligence Centre (FIC) and Financial Sector Conduct Authority (FSCA) have clamped down hard on non-compliance and are making sure that South Africans grasp the severity of being found to be non-compliant.
Our team researched notable fines handed out over the last twelve months, and the statistics are shocking:
- Period: One year (February 2024 – February 2025)
- Total Value of Fines: R183,123,000
- Average Value of Fine: R9,638,000
The fines span several different industries and demonstrate that the FSCA has greatly expanded its scope: while FICA fines used to almost exclusively be handed down to financial institutions, the last twelve months have seen law firms and real estate agents fined in equal measure
Below are some especially notable examples of FICA fines, as well as the specific reasons for why they were issued.
Standard Bank:
- Date: January 2025
- Total Fine: R13 million
- Contraventions: insufficient or total absence of required CDD procedures; failure to properly monitor tens of thousands of clients for changes in AML risk indicators, like sanctioned and PEP/DPEP/FPEP status; and failure to properly file Suspicious Transaction Reports (STRs).
- Report: Access Here
KR Inc Law Firm:
- Date: November 2024
- Total Fine: R7.7 million
- Contraventions: Failure to design, implement and maintain a sufficient RMCP; failure to file RCR; failure to screen for AML risk indicators like sanction and watchlist status.
- Report: Access Here
Ashburton Fund Managers
- Date: February 2024
- Total Fine: R16 million
- Contraventions: Defective RMCP; failure to assess and verify AML risks associated with PEP/DPEP/FPEP status and sanction/watchlist status; failure to properly assess and mitigate suspicious transactions.
- Report: Access Here
HSBC
- Date: October 2024
- Total Fine: R9.5 million
- Contraventions: Failure to properly design, implement and maintain a sufficient RMCP.
- Report: Access Here
Safrican Insurance Company
- Date: July 2024
- Total Fine: R7 million
- Contraventions: Failure to uphold CDD and EDD obligations; failure to verify and monitor PEP/DPEP/FPEP status, as well as sanction and watchlist status; insufficient record keeping; a sufficient RMCP.
- Report: Access Here
Assupol Life
- Date: August 2024
- Total Fine: R4 million
- Contraventions: Failure to conduct CDD and EDD; failed record keeping; insufficient monitoring of PEP/DPEP/FPEP status; inadequate RMCP design and implementation, resulting in non-compliant risk assessment and mitigation.
- Report: Access Here
Bank of China
- Date: June 2024
- Total Fine: R30.5 million
- Contraventions: improper CDD and EDD; failure to monitor PEP/DPEP/FPEP status; insufficient RMCP design and implementation; failure to file STRs and CTRs.
- Report: Access Here
How to Ensure Your FICA Compliance
As the FIC and FSCA begin clamping down on FICA compliance across all South African industries, it is essential that your business ticks the essential compliance boxes so that you will pass your FIC audit and avoid hefty fines.
There are some essential steps that you must take:
- Register as an accountable institution with the FIC on the goAML EE platform, accessible via the FIC’s website here.
- Appoint an AML Compliance Officer who will take responsibility for overseeing all FICA compliance systems and workflows.
- Develop a comprehensive Risk Management and Compliance Program (RMCP) that will outline the KYC/customer due diligence checks that your business needs to implement in order to be compliant with FICA.
- Implement and perform the necessary customer due diligence checks. Most often, these include:
- Identity Verification
- PEP/DPEP/FPEP Checks
- Watchlist Screening
- Address Verifications
- Rescreen and/or monitor your clients to ensure that all information remains updated, as required by your RMCP.
- Submit reports to the FIC, such as Suspicious Transaction Reports (STRs) and Cash Threshold Reports (CTRs).
- Keep record of all customer due diligence checks, which are to be audited by the FIC.
- Ensure your employees are sufficiently trained on FICA compliance and AML issues, as required by your RMCP.
Although this is far from an exhaustive list and does not constitute legal advice, these are many of the fundamental steps that are required in order for your business to ensure compliance with FICA.
ThisIsMe offers all of the customer due diligence solutions that your business needs in order to comply with FICA. To discover how we can help your business ensure compliance and pass its FIC audit, schedule a demo here.
