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Consequences of non-compliance with FICA
- 20 December 2023
- Account / Profile
- South African Accounting Academy
This information applies also to those institutions included on Schedule 1 of the Financial Intelligence Centre Act, 2001 (Act 38 of 2001) since December 2022.
The administrative sanctions that the FIC may impose in terms of section 45C (3) of the Financial Intelligence Centre Act, 2001 (Act 38 of 2001) (FIC Act) for non-compliance with the FIC Act is any one or more of the following sanctions:
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A caution not to repeat the conduct which led to the non-compliance
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A reprimand
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A directive to take remedial action or to make specific arrangements
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The restriction or suspension of certain specified business activitiesÍž or
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A financial penalty not exceeding R10 million in respect of natural persons and R50 million in respect of any legal person.
The FIC may refer matters to the South African Police Service, the National Prosecuting Authority or other enforcement agencies for criminal investigation and prosecution, as this is not within the mandate of the FIC.
Accountable institutions are required to ensure they have complied with any directive issued by the FIC, including Directive 7, which required the online submission of a risk and compliance return to the FIC by 31 July 2023. Refer to our Technical Alert dated 3 April 2023
Click here to download the Media Statement:
https://www.fic.gov.za/wp-content/uploads/2023/12/2023.12-MR-Consequences-of-non-compliance.pdf
Relevance to Auditors, Independent Reviewers & Accountants:
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FICA is yet another piece of legislation that your clients must comply with, and which you must assess compliance with. If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (Non-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.
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As an auditor, independent reviewer and accountant, you need to be aware of publications that you and your clients can use in practice.
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You need to consider that your clients who are regarded as accountable institutions, are complying with their responsibilities in terms of FICA.
Relevance to Your Clients:
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An accountable institution must comply with the FIC Act and its obligations, otherwise they could be held liable.
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Your clients need to be aware of publications that they can use in practice.