The Financial Intelligence Centres (FIC) patience with firms that have failed to file risk compliance returns, particularly law firms and estate agents , is running out as the watchdog has accused the businesses of wilfully standing in the way of South Africas exit from a damaging international greylist.
South Africa was last year added to the Financial Action Task Forces (FATF) greylist of countries with an increased risk of money laundering, terror financing and proliferation. The task force directed South Africa to enhance its supervision over designated non-financial businesses and professions (DNFBPs).
This led the FIC to require that DNFBPs file a risk and compliance return (RCR), which includes general information about a firm and a general questionnaire. However, the FIC said compliance with the requirement has been as low as 60% among legal practitioners and 66% among estate agents.
The FIC once more notifies these sectors, other than the casinos, that by not submitting their RCRs they are in a state of non-compliance. They are therefore positioning themselves to have administrative sanctions imposed on their businesses, it said.
The FIC can impose a financial penalty not exceeding R10m on individuals and R50m on legal persons, with penalties imposed on a case-by-case basis. Compliance is higher among trust service providers at 74%, company service providers at 76%, and casinos at 100%.
