The records of the identity of clients, and their transaction activities, will sometimes be the only available evidence to assist law enforcement authorities in the detection, investigation and prosecution of illicit flows of funds and the subsequent confiscation of those criminal funds.  

Due diligence records that must be kept include documents used in verifying the identity of a client, the source of funds and the nature of the business relationship.

Transaction records which must be retained include the amount and currency involved, the parties and nature of the transaction, business correspondence and the identifying particulars of all accounts, account files and account facilities.

In addition, the Financial Intelligence Centre is entitled to examine, make extracts from or copies of any such record.

Failure to comply with the record retention requirements under FICA constitutes as an offence and the accountable institution will be subject to an “administrative sanction.”

The nature of the sanction is determined at the discretion of the Financial Intelligence Centre, the factors which are taken into account include the nature of the non-compliance with FICA, previous compliance history and remedial action taken to prevent a recurrence of the non-compliance.

The sanction may include:

• a caution not to repeat the conduct;
• a reprimand;
• a directive to take remedial action or to make specific arrangements;
• the restriction or suspension of certain specified business activities; and
• a financial penalty not exceeding ZAR10 million in respect of natural persons and ZAR50 million in respect of legal persons.