FAQ's

The Financial Intelligence Centre Act, 2001 (“FICA”) has the objective to objective to regulate South Africa’s anti-money laundering and counter- terrorism financing programs.

In terms of Guidance Note 3A, published by the Financial Intelligence Centre:

“Apart from criminalising the activities constituting money laundering, South African law also contains a number of control measures aimed at facilitating the detection and investigation of money laundering. These control measures, as contained in the Financial Intelligence Centre Act, 2001 (the “FIC Act”), are based on three basic principles of money laundering detection and investigation, i.e., that:

• intermediaries in the financial system must know with whom they are doing business;
• the paper trail of transactions through the financial system must be preserved;
• possible money laundering transactions must be brought to the attention of investigating authorities.

The control measures introduced by the FIC Act include requirements for institutions to establish and verify the identities of their clients, to keep certain records, to report certain information and to implement measures that will assist them in complying with the FIC Act. The majority of obligations under the FIC Act apply to “accountable institutions”. These are institutions that fall within any one of the categories of institutions listed in Schedule 1 to the FIC Act.”

The Financial Intelligence Centre (“FIC”) is the agency responsible for the collection, analysis and disclosure of information to assist in the detection, prevention and deterrence of money laundering in South Africa. The FIC is also empowered to provide guidance in respect of compliance with FICA.

Yes, BC Funding Solutions became an accountable institution in December 2023, as defined by section 1 of the Financial Intelligence Centre Act (FICA).

Some of the core responsibilities of BC Funding Solutions are as follows (not exhaustive):

• Client Identification and Verification:
• • Duty to identify and verify both new and existing clients.

• Record Keeping:
  • Maintain records of client identities, potential clients, and transactions.

• Retention and Amendment of Records:
  • Ensure the proper retention and amendment of records in accordance with the FICA Act.

• Reporting Obligations:
  • Report large or suspicious transactions to the Financial Intelligence Centre as required by the FIC Act.

• Internal Rules and Training:
  • Formulate and implement internal rules consistent with FICA obligations.
  • Offer compulsory FIC Act training to employees.

• Compliance Monitoring:
  • Appoint a responsible person as a compliance officer to monitor business compliance.

Yes, there are two types of penalties for non-compliance with FICA, namely:

• Administrative sanction, which includes:
  • a caution not to repeat the conduct which led to the non-compliance referred to in subsection (1);
  • a reprimand;
  • a directive to take remedial action or to make specific arrangements;
  • the restriction or suspension of certain specified business activities; OR
  • a financial penalty not exceeding R10 million in respect of natural persons and R50 million in respect of any legal person.

• Criminal sanction, which includes:
  • a maximum penalty of 15 years or a fine not exceeding R100 million; or
  • a maximum sentence of five years or a fine not exceeding R10 million for certain lesser offences.

FICA makes use of the Know Your Client (“KYC”) business principle to encourage relevant companies to “establish and verify the identity of their customers/clients before or during the time they do business.” The KYC principle plays a very important role in the compliance with the FICA requirements and responsibilities, amongst other it provides for controls which usually include the:

• collection and verification of identity documentation;
• screening against warning lists;
• client risk assessment; and
• investigations into client’s financial transactions.