FICA: Failure to report electronic transfers to/from the Republic

FICA: Failure to report electronic transfers to/from the Republic

• 25 August 2023
• Accounting
• South African Accounting Academy

Section 56 deals with Failure to report electronic transfers as per Section 31. Both sections 56 and 31 commenced on 1 February 2023.

The FIC Amendment Act 2017 amended section 56 as follows on 18 August 2023, by adding in subsection (2):

1. An accountable institution that fails to report to the Centre the prescribed information in respect of an electronic transfer of money in accordance with section 31, is guilty of an offence.

2. An accountable institution that fails to report to the Centre the prescribed information in respect of an electronic transfer of money in accordance with section 31, is non-compliant and is subject to an administrative sanction.

Section 31:   Electronic transfers of money to or from Republic

This section commenced 1 February 2023

If an accountable institution through electronic transfer sends money in excess of a prescribed amount out of the Republic or receives money in excess of a prescribed amount (R19 999,99 as per Sec 23D) from outside the Republic on behalf, or on the instruction, of another person, it must:

• within the prescribed period after the money was transferred (ASAP but no later than 3 days),

• report the transfer, together with the prescribed particulars concerning the transfer, to the Centre.

Click here to download the FIC Amendment Bill:

https://static.pmg.org.za/160517_FICA_Bill_B_Version_Clean.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

• The Financial Intelligence Centre Amendment (FIC) Act 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 and regulations that are gazetted relating to FIC – specifically when certain sections become effective.

• It is also important to be aware of the latest actions that can lead to non-compliance and result in administrative penalties.

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 and regulations that are gazetted relating to FIC – specifically when certain sections become effective.

• It is also important to be aware of the latest actions that can lead to non-compliance and result in administrative penalties.

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