FICA is the Financial Intelligence Centre Act, which requires accountable institutions to identify and verify their clients, keep records, and report certain transactions. For customers it is the reason banks and other institutions ask for identity documents and proof of address.
For businesses that are accountable institutions, FICA obligations are substantial and go well beyond collecting documents. They include a risk management and compliance programme, ongoing due diligence, and mandatory reporting.
Business Requirements at a Glance
Accountable institutions are required to do the following.
- Identify and verify every client before establishing a business relationship
- Establish and verify beneficial ownership for legal entities
- Apply a risk-based approach, with enhanced due diligence for higher-risk clients
- Maintain a risk management and compliance programme
- Keep records of client identification and transactions for the prescribed period
- Report cash threshold transactions, suspicious transactions and terrorist property
- Register with the Financial Intelligence Centre
- Screen clients against sanctions and targeted financial sanctions lists
Registration and Legal Requirements
Accountable institutions are listed in a schedule to the Act and include banks, attorneys, estate agents, financial services providers, casinos, high-value goods dealers and others. The list has been expanded over time, so businesses that were previously outside it may now be within it.
Being an accountable institution is determined by what you do rather than by whether you consider yourself a financial business.
Documents and Ownership Information Required
For individual customers, institutions typically require an identity document and proof of residential address. For entities, they require registration documents, identity documents for directors or members, and details of beneficial owners.
Beneficial ownership is the requirement most often misunderstood. Institutions must establish the natural persons who ultimately own or control an entity, which means tracing through holding structures.
Tax, Licence and Compliance Requirements
Non-compliance carries administrative sanctions including substantial penalties, and the Financial Intelligence Centre and supervisory bodies conduct inspections.
A risk management and compliance programme is a documented programme rather than an informal practice. It must be in writing, approved, and actually implemented.
South Africa listing and delisting on international watch lists has driven increased supervisory attention, so enforcement in this area has intensified.
Process, Deadlines and Ongoing Obligations
If you are unsure whether your business is an accountable institution, establish it definitively rather than assuming. The consequences of being one and not knowing are significant.
This page is general information and not legal or tax advice. Confirm current requirements, fees and thresholds with the responsible authority, and take professional advice on your specific circumstances.
Frequently Asked Questions
What is FICA?
The Financial Intelligence Centre Act, requiring accountable institutions to identify clients, keep records and report certain transactions.
Why do banks ask for proof of address?
Because FICA requires them to identify and verify clients before establishing a business relationship.
Is my business an accountable institution?
It depends on what you do. The schedule to the Act lists them and has been expanded over time. Establish it definitively rather than assuming.
What is beneficial ownership?
The natural persons who ultimately own or control an entity. Institutions must trace through holding structures to establish it.
Confirm your obligations with the Financial Intelligence Centre and your supervisory body. This page is general information and not legal or tax advice. Confirm current requirements, fees and thresholds with the responsible authority, and take professional advice on your specific circumstances. Browse all business and compliance requirements.