Financial Crime World

Financial Crime Reporting in South Africa: A Guide for Businesses

Introduction

In an effort to combat money laundering, terrorist financing, and proliferation financing, the Financial Intelligence Centre Act (FIC Act) requires all accountable institutions in South Africa to report suspicious transactions, cash transactions above a certain threshold, and terrorist property. This guide provides businesses with the necessary information to comply with these regulations.

Registration with the Financial Intelligence Centre (FIC)

The first step towards reporting financial crime is registration with the FIC. Registration is free and can be done via the FIC’s online system. Recent amendments have expanded the scope of accountable institutions to include:

  • Trust and company service providers
  • Credit providers
  • Legal practitioners
  • High-value goods dealers
  • Money transfer services
  • Crypto asset service providers

Transaction Monitoring

Once registered, businesses must perform transaction monitoring to identify reportable transactions or behavior. This involves using automated systems to detect suspicious patterns and reporting them to the FIC as soon as possible but no later than 15 days of becoming aware of the suspicion.

Types of Reports

There are three main types of reports that businesses must submit:

Cash Threshold Reports (CTRs)

Businesses must file a report when a cash transaction exceeds R49,999.99.

Suspicious and Unusual Transaction Reports (STRs)

Businesses must report any transactions or activities that involve money laundering, terrorist financing, or contravention of financial sanctions.

Terrorist Property Reports (TPRs)

Businesses must submit a TPR when they possess property or are in control of property of a person or entity designated on a United Nations Security Council targeted financial sanctions list.

Consequences of Non-Compliance

Failure to report financial crime can result in severe penalties, including fines and imprisonment. Businesses that fail to comply with the FIC Act may also be subject to reputational damage and loss of business.

Ensuring Compliance

To ensure compliance, businesses should:

  1. Register with the FIC
  2. Perform transaction monitoring using automated systems
  3. Report suspicious transactions or behavior as soon as possible but no later than 15 days of becoming aware of the suspicion
  4. Submit CTRs when a cash transaction exceeds R49,999.99
  5. File TPRs when possessing property or being in control of property of a person or entity designated on a targeted financial sanctions list