On 02 April 2025 the Financial Sector Conduct Authority issued a press release setting out the administrative sanctions it had issued to three more financial services providers. The sanctions follow a continued trend by the FSCA to supervise the anti-money laundering and counter-terrorist financing efforts of the financial services industry and penalise any non-compliance found. The sanctions range between R200 000 and R785 000, each with portions suspended, and were issued based on similar findings of non-compliance consistently dealt with in previous sanctions decisions.

Accountable institutions are required by section 42(1) of the Financial Intelligence Centre Act to “develop, document, maintain and implement a programme for anti-money laundering, counterterrorist financing and proliferation financing risk management and compliance.” One FSP was found in contravention of the section entirely, while the other two RMCPs submitted were “deficient in that they failed to outline how the respective institutions would comply with various FIC Act requirements.” Template RMCPs are a useful starting point, but each accountable institution must tailor the document to its own risks and client base.

Another common finding is that customer due diligence measures were not performed adequately or at all. The specific contravention mentioned in the press release was a failure “to perform the necessary customer due diligence as required in terms of the FIC Act, including taking measures to establish whether any of its clients is a family member or known close associate of a foreign or domestic politically exposed person or a prominent influential person.” Careful attention is required regarding the records held by each accountable institution which must match the requirements of the FIC Act and what has been set out in that accountable institution’s RMCP. Public Compliance Communication 51, issued by the Financial Intelligence Centre, for example suggests requesting information regarding foreign or domestic politically exposed persons “directly from the client or other persons, and scrutinising client information through screening against relevant open data sources or against commercial databases or conducting independent research.”

Accountable institutions are obliged under the FIC Act to scrutinise client information against targeted financial sanctions lists published by the United Nations Security Council. Public Compliance Communication 44A, takes the obligation further, requiring the information to be scrutinised at client onboarding, when conducting transactions, and when the targeted financial sanctions list is updated. The list is available, searchable and up-to-date on the FIC’s website and search results should either be saved as a PDF in the relevant client file, or an audit trail should be available where an automated sanctions screening system is used. Evidence is required showing that client information was scrutinised to avoid a finding of non-compliance. Similar requirements apply to other accountable institutions.

Our previous blog on FICA sanctions is available here.