All attorneys are obligated to register with the Centre in terms of section 43B of the Financial Intelligence Centre Act No 38 of 2001, as amended (the FIC Act).
We are advised that The Centre is now in a position to commence inspections in terms of section 45B of the FIC Act for financial intelligence centre purposes of determining compliance with the relevant provisions of the FIC Act.
The failure of institutions to register with the Centre constitutes a contravention of the FIC Act, which carries a maximum criminal fine of R10 million or 5 years in prison, or an administrative sanction. The administration sanction may include, but is not limited to, a reprimand, a restriction of business activities or a financial penalty not exceeding R10 million for natural persons and R50 million in respect of any legal person.
Attorneys are obliged to file cash threshold reports with the Centre in terms of section 28 of the FIC Act. Section 28 of the FIC Act requires that accountable and reporting institutions must within 2 business days, report to the Centre the prescribed particulars concerning a cash transaction.
The obligation to report suspicious transactions to the Centre in terms of section 29 of the FIC Act applies to all businesses in South Africa, including attorneys.
The FIC Act requires the following persons to report contraventions in terms of section 29 to the Centre:
- A person who carries on a business of an attorney;
- A person who is in charge of or manages an attorneys firm; or
- A person who is employed by an attorney.
The requirement to report suspicious or unusual transactions applies to all attorneys practicing as single practitioners or as part of an attorneys firm.
In simple terms clients aught to be aware that any attorney who wishes to remain in practice will report suspicious transactions as designated by the Act and that even if the attorney is remiss, that the obligation to report suspicious transactions extends inter-alia to employees of the Attorneys firm.
This note should serve as a cautionary to attorneys, their staff and all clients.
Ian Mc Laren
Founder Mc Larens Attorneys