Ensuring the safety and security of funds is a top priority for financial institutions worldwide. To this end, the South African Government has put in place various regulations to guide the operations of financial institutions. We have written several articles on the recent changes to the Financial Intelligence Centre Act, 2001 (“FICA”) and the regulations promulgated under FICA. A few additional changes occurred on 1 February 2023 when the long-awaited provisions regulating international funds transfer reports (“IFTRs”) commenced.

If an accountable instituition through electronic transfer, sends money in excess of a prescribed amount out of South Africa or receives money from ZAR20 000 and above from outside the country on the behalf or on the instruction, of another person, it must, within three days of becoming aware of such transfer, file an IFTR with the Financial Intelligence including prescribed particulars set out in the regulation including full particulars of the location where the transaction took place.

Non-compliance with the IFTR filing requirement is an offence that may result in administrative sanctions. Any accountable institution or person that fails to provide the information required for an international funds transfer report is considered non-compliant. A question for consideration is whether these provisions apply to all accountable institutions or only some.

The obligation to file IFTRs applies only to certain categories of accountable institutions that are authorised to conduct the business of cross-border electronic fund transfers. These are institutions that are authorised in terms of the Regulations under the Currency and Exchanges Act, 1933 (“Excon Regulations”) to conduct authorised transactions under these regulations, namely authorised dealers, authorised dealers with limited authority, a category of financial services providers that have a direct reporting dispensation under the Excon Regulations and the Post Office.

For accountable institutions seeking to ensure compliance with the regulations of FICA, ENSafrica provides valuable support, including customised in-house training.

Angela Itzikowitz

Executive Banking and Finance

[email protected]

Era Gunning

Executive Banking and Finance

[email protected]m