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FICA Appeal Board Judgment
- 06 September 2024
- Regulatory Compliance and Legislation
- South African Accounting Academy
The company was fined for not developing a risk RMCP (Risk Compliance Management Programme) on time, failing to scrutinize clients against the targeted financial sanctions (TFS) list, and not complying with Directive 6 – which required the accountable institution to submit their Risk and Compliance Return (RCR).
Although the appellant remediated some of their non-compliance after the enforcement process had commenced, the fines were nonetheless applicable.
The ruling underscores the importance of adhering to anti-money laundering and counter-terrorism financing regulations.
In addition, the judgment emphasised that accountable institutions must take their FIC Act obligations seriously to ensure no major transgressions are found during FIC inspections.
Click here to access the following relevant documents:
Judgment at https://www.fic.gov.za/wp-content/uploads/2024/08/Appeal-Decision-Capital-Point-Properties-Pty-Ltd.pdf
Administrative sanction at https://www.fic.gov.za/wp-content/uploads/2024/08/Administrative-sanction-Capital-Point-Properties-Pty-Ltd.pdf
Click here to download the Web Notice document:
Relevance to Auditors, Independent Reviewers & Accountants:
- 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.
- 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.
- As an accountable institution, you have certain reporting obligations to FIC, as well as additional requirements, e.g. to submit your RCR in terms of FIC Directive 6.
- As a practitioner, you need to improve your awareness of Terrorist Financing and the risks related to money laundering.
Relevance to Your Clients:
- Relevant entities (specifically accountable institutions) have a duty to comply with the FIC Act, otherwise they could be held liable.
- 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.
- All accountable institutions should adhere to additional requirements, e.g. to submit their RCR in terms of FIC Directive 6, or face administrative sanctions.