New categories of accountable institutions in terms of the Financial Intelligence Centre Act (FICA)

The Financial Action Task Force identifies countries with weak measures to combat money laundering and terrorist financing, and places those countries on either the “black-list” or the “grey-list” depending on the severity of the assessment. South Africa was one of the countries identified as having weak measures to combat money laundering and terrorist financing and has since been placed on the “grey-list”.

There are several negative outcomes of being placed on the “grey-list” for South Africa, the most severe of which is potential blacklisting, incurring mandated sanctions as well as substantial reputational harm. As a consequence, South Africa’s grey-listing makes doing business in South Africa very difficult. 

It is imperative that South Africa be removed from the “grey-list” in order for the country to continue to thrive economically. The Financial Intelligence Centre (FIC) has therefore implemented stringent measures and frameworks which need to be adhered to in order to combat money laundering and terrorist financing. 

One of the measures that the FIC has taken to improve South Africa’s grey-listing status was to add new accountable institutions to Schedule 1 of the FICA. Accountable institutions are entities or persons that must fulfil certain requirements imposed by the FICA. 

The new accountable institutions which must comply with the FICA include (but are not limited to):

The deadline to register as an accountable institution in line with the FICA amendments was the 27 February 2023, however if you are required to register and have not done so, It is imperative to register with the FIC as soon as possible as failure to do so could result in an administrative sanction or fine. 

Accountable institutions are not only required to register with the FIC, the FICA also requires accountable institutions to appoint a compliance officer, develop and implement a risk management and compliance programme, train employees on the FICA, perform customer due diligences and report suspicious and unusual transactions, amongst various other requirements. 

It is imperative for accountable institutions to meet the requirements of the FICA and to formalise their compliance in a manner that combats money-laundering and terrorist financing. In developing a culture of compliance, we can work together to aid South Africa in being removed from the “grey-list”.​​