FIC clamping down on businesses in 2025
South Africa’s Financial Intelligence Centre (FIC) has sent a stern warning that institutions that do not comply with risk and compliance returns (RCR) submission requirements will face harsh financial penalties.
Fines range from R10,000 to R50,000, with some facing even further sanctions for non-compliance.
“Institutions are advised to urgently submit [RCRs] or face the consequences. It is inevitable that the longer the non-compliance persists, the harsher the financial penalties will become,” the FIC said in a December statement.
The FIC’s work involves anti-money laundering and countering the financing of terrorism and proliferation – key shortfalls that led to South Africa being placed on the notorious grey list by the Financial Action Task Force (FATF).
The requirement for filing RCRs is integral to ensuring that the country’s businesses are aware of how they can be used for laundering proceeds acquired through criminal activities.
Those particularly vulnerable to being used by criminals to launder money, and have thus been required to submit RCRs include:
- Legal practitioners;
- Trust and company service providers;
- Estate agents;
- Gambling institutions;
- Credit providers;
- The South African Post Bank;
- High-value goods dealers;
- The South African Mint Company;
- Crypto asset service providers.
These businesses are considered gatekeepers because they provide access to financial services and can be used to move money into the financial system.
“By exploiting these businesses, criminals can do lasting damage to the financial system and the economy, let alone the businesses themselves,” said the FIC.
With South Africa’s goal firmly set on exiting the grey list this year, the FIC has emphasised that it plans to impose heavy penalties on firms that fail to submit the required returns.
The RCR submitted provides the FIC information to develop a risk rating for each institution.
“In doing so, the FIC is able to identify institutions that are at higher-risk, and therefore most vulnerable to money laundering abuse,” said the entity.
However, the Centre said that not everyone is coming to the table.
“While the majority of businesses that were registered with the FIC.. have submitted their RCRs, there are others, especially legal practitioners, estate agents, Krugerrand dealers and crypto asset service providers, that have remained non-compliant, said the FIC.
Its December 2024 media release detailed penalties levied against 286 businesses for non-compliance with directives requiring RCRs.
Failure to submit RCRs resulted in fines ranging from R10,000 to R50,000, with some businesses facing further sanctions.
Jan Augustyn, manager for inspections and enforcement at the FIC, explained that businesses that do not submit RCRs are given an opportunity to correct their non-compliance.
They can submit the RCR and pay a penalty of R10 000.
Augustyn said that the fines are couched as an admission of non-compliance sanctions, providing the institution with an opportunity to immediately correct its non-compliance and to submit a RCR and pay a small financial penalty of R10 000.
Out of the 286 institutions penalised, 64 submitted their RCR and paid the penalty, 77 submitted the RCR but did not pay, and 145 did neither.
Institutions that did not remediate or pay “lose the benefit of having paid a smaller fine and immediately correct their non-compliance and now face more severe penalties,” said Augustyn.
He emphasised that even though the deadlines have passed, businesses can still submit their RCRs, and they should do it urgently to avoid harsher penalties.
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