From CompliNEWS | Financial Service Intelligence Watch

Heavy penalties for FIC non-compliance

Non-financial businesses and professional firms could face stiff penalties if they neglect to submit risk and compliance returns to the Financial Intelligence Centre (FIC). The FIC said in a December statement that identified institutions which have not submitted risk and compliance returns (RCRs) could face penalties from R10 000 to R50 000. A Business Day report notes more than 280 entities have already been fined, with the FIC pointing to non-compliance by legal practitioners, estate agents, Krugerrand dealers and crypto asset service providers. ‘One of FATF’s (Financial Action Task Force) key findings after its 2019 mutual evaluation of the country was that the non-financial businesses and professions did not understand the risks they faced of money laundering and terrorist financing,’ the FIC said. ‘This made these sectors and the country vulnerable to exploitation by criminals. The RCR was developed to address this gap.

The FIC analyses the information that is submitted by the respondents to develop a risk rating for each institution. In doing so, the FIC is able to identify institutions that are at higher risk and most vulnerable to money laundering abuse.’ It said admission of non-compliance penalties had been imposed on 286 entities R1m in penalties had been imposed on legal practitioners, R230 000 on 23 trust and company service providers, R1.5m on 152 estate agents and R70 000 on seven diamonds and precious metals dealers.

Read the Full Business Day report here

Read the Additional reporting by BusinessTech here