The Financial Intelligence Centre (FIC) has issued published Draft Directive 3A and Draft Public Compliance Communication 50A for public consultation.
Draft Directive 3A and Draft PCC 50A update Directive 3 and PCC 50, respectively, to include the international funds transfer reporting obligation.
International Funds Transfer Reports (IFTRs) were introduced in 2023 as part of amendments under sections 31 and 56 of the Financial Intelligence Centre Act (FICA), focusing on cross-border electronic funds transfers exceeding a prescribed threshold of R19 999.99. This threshold, set by Regulation 23D, aims to capture transactions likely to be involved in financial crimes, aligning with international standards set by the Financial Action Task Force.
Directive 3 was first issued in September 2014 and applies to all accountable institutions and to other persons who are obliged to file reports with the FIC in terms of FICA. Directive 3 was issued before the commencement of section 31, which contains the IFTR obligation, and section 56, which deals with the failure to report electronic transfers.
Section 31 commenced on 1 February 2023 and Draft Directive 3A has been updated to include the requirement to notify the FIC of a failure to submit IFTRs or to remediate a defective IFTR. Draft Directive 3A has also been updated to include a reference to proliferation financing, to align with section 3 of FICA.
PCC 50 was first published in March 2021 before the commencement of the IFTR obligation, and Draft PCC 50A has been updated to include IFTRs. Draft PCC 50A must be read with Draft Directive 3A because it provides guidance to reporters on measures aimed at preventing, remediating, and mitigating reporting failures, and elaborates on the process to be followed when applicable.
The obligation to submit IFTRs falls on accountable institutions authorised to conduct cross-border electronic funds transfers. These include:
- Banks, as primary handlers of international transactions.
- Authorised dealers, recognised under the Currency and Exchanges Act for conducting such transactions.
- Financial services providers with a direct reporting dispensation under the Exchange Control Regulations.
IFTRs are required for two types of transactions:
- Outgoing transfers – when money is sent out of South Africa on behalf of or at the instruction of another person, exceeding R19 999.99.
- Incoming transfers – when money is received from outside South Africa under similar conditions, also exceeding the threshold.
The electronic nature of these transactions is key, covering wire transfers, SWIFT payments, and other digital methods, but not physical cash movements, which are addressed separately under other FICA reporting requirements.
Reporting specifications
The deadline for submitting an IFTR is governed by Regulation 24(5) of the Money-Laundering and Terrorist-Financing Control Regulations, which states that the report must be sent “as soon as possible but not later than three days after the accountable institution becomes aware of the transaction”. The FIC’s Guidance Note 9, published in November 2023, clarifies that these three days exclude Saturdays, Sundays, and public holidays, effectively making it three working days.
The point of “awareness” is defined in the Guidance Note as the date when the value of funds is given to the beneficiary, enabling unfettered receipt. This means the deadline starts from when the transaction is completed and the recipient can access the funds, ensuring a clear trigger for the reporting period.
Each IFTR transaction must be reported separately. Multiple transactions may not be reported as one summarised transaction.
Deadline to comment
Submissions on both the draft directive and the draft PCC will be received until the close of business on Friday, 21 March 2025.
Comments on Draft Directive 3A must be submitted via this online consultation form.
Comments on Draft PCC 50A must be submitted via a separate online consultation form.
