Finance Minister Enoch Godongwana has set the threshold above which accountable institutions that send money outside South Africa or receive money from abroad must file a report with the Financial Intelligence Centre (FIC). The threshold is R19 999.99.
This is one of the amendments to the regulations issued under the Financial Intelligence Centre Act gazetted by the minister on 20 January. The regulations take effect on 1 February.
Regulation 1 has been amended to insert the definition of an “international funds transfer report” – it is a report that must be submitted in terms of section 31 of Fica.
Section 31 states: “If an accountable institution through electronic transfer sends money in excess of a prescribed amount out of the Republic or receives money in excess of a prescribed amount from outside the Republic on behalf, or on the instruction, of another person, it must, within the prescribed period after the money was transferred, report the transfer, together with the prescribed particulars concerning the transfer, to the Centre.”
The definition of “reporter” has been amended to include “an accountable institution making an international funds transfer report under section 31 of the Act as contemplated in regulation 23E”.
The threshold for the international funds transfer report is provided for by the insertion of regulation 23D.
A new regulation 23E sets out the information that must be included in an international funds transfer report.
Sub-regulation (5) has been added to regulation 24 to stipulate the deadline by which the report must be submitted to the FIC.
The report must be sent to the Centre “as soon as possible but not later than three days after a natural person or any of his or her employees, or any of the employees or officers of a legal person or other entity, has become aware of a fact of an international funds transfer that has exceeded the prescribed limit”.
In terms of amendments to regulation 29, any person or institution that fails to provide the information required in accordance with regulation 23E is guilty of an offence.
Click here to download the notice amending the regulations.
Revised guidance note
Meanwhile, the FIC has invited the public to comment on the revised version of its guidance note on international funds transfer reports.
Draft Guidance Note 104A provides accountable institutions with general guidance on the obligations in terms of section 31 of Fica. In particular, it explains reporting timelines, how reports must be sent to the Centre, what information has to be included in these reports, and how to use the electronic reporting mechanism.
Comments on GN 104A must be submitted using the online link by Wednesday, 1 February.
Am I understanding this correctly?
I am reading it that the finance minister now wants to introduce regulations that forces financial instiutions to report all amounts leaving the country or entering the country over the amount of R19,999 (R20k).
The regulation applies to accountable institutions that (already) are authorised to conduct cross-border funds transfers. Only some financial institutions have this authorisation, in terms of the Regulations under the Currency and Exchanges Act. Institutions
with this authorisation are Authorised Dealers and Authorised Dealers with Limited Authority, as well as a category of financial services providers that have a direct reporting dispensation under the Exchange Control Regulations. Yes, the threshold is R20k.
Hi Mark
What is the situation where cash is received from Zimbabwe?
The regulations apply if the money is transferred via an accountable institution (as defined by Fica and the schedules to the Act) and the R19999.99 threshold is exceeded.
Thank you Mark.
Q
Does this reporting obligation of international receipts and payments apply to all accountable institutions, including law firms?
International funds transfer reports are applicable to items 6 (banks) and 19 (money remitters).