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FIC: Sanction Notice re Risk and Compliance Return
- 23 October 2023
- Legal and Compliance
- South African Accounting Academy
The FIC issued Directive 6 on 31 March 2023, obliging affected accountable institutions listed in Schedule 1 of the FIC Act to submit an RCR to the FIC by 31 May 2023. (Refer to SAAA Technical Alert of 3 April 2023)
The affected institutions referred to in Directive 6 are: item 1 – legal practitioners; item 2 – trust and company service providers; item 3 – estate agents and item 9 – gambling institutions.
On 25 August 2023, the FIC issued an Advisory: Failure to comply with Directive 6 of 2023 related to the submission of risk and compliance returns, which served as a final demand to non-compliant institutions to submit the required RCR to the FIC.
This notice cautions non-compliant accountable institutions that have not yet submitted their RCRs, by Friday, 13 October 2023, that they will be sanctioned with an administrative sanction (which may include a financial penalty), by the FIC.
Click here to download the FIC Notice:
Relevance to Auditors, Independent Reviewers & Accountants:
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The Financial Intelligence Centre Act (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 and independent reviewer, you need to consider amendments, regulations and directives that are gazetted relating to FIC and accountable institutions, to ensure that your clients (or even your own practice) comply with their reporting obligations.
Relevance to Your Clients:
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Relevant entities (specifically accountable institutions) have a duty to comply with the FIC Act, otherwise, they could be held liable.
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Relevant entities should be aware of amendments, regulations and directives that are gazetted relating to FIC and accountable institutions, to ensure that they comply with their reporting obligations.