From CompliNEWS | Financial Service Intelligence Watch

South Africa’s FSCA clamps down on financial non-compliance with hefty fines for FICA non-compliance

The Financial Sector Conduct Authority (FSCA) has recently issued administrative sanctions against three financial services providers for failing to comply with the Financial Intelligence Centre Act (FICA). The fines imposed range from R400 000 to R16 million, signaling the FSCA’s intensified enforcement of anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations.

The sanctioned firms had Risk Management and Compliance Programmes (RMCPs) in place, but these were deemed inadequate by the FSCA. Key issues included failures in implementing effective RMCPs, inadequate customer due diligence, and insufficient monitoring of suspicious transactions.

This action is part of a broader effort to address the deficiencies that led to South Africa being placed on the Financial Action Task Force’s (FATF) grey list in February 2023. Since then, South Africa has been actively amending its legislation and enhancing its regulatory frameworks to meet FATF’s requirements, including improving the accuracy and availability of beneficial ownership information and ensuring effective implementation of targeted financial sanctions.

The FSCA’s rigorous stance is a clear warning to all financial institutions about the severe consequences of non-compliance. As the authority continues to enforce strict regulations, financial services providers are urged to enhance their AML/CFT frameworks to avoid future penalties and contribute to the integrity of the global financial system.

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