Following last month’s related article, Peter from Bellville had an interesting question with regards to the Financial Intelligence Centre Act and the reporting of cash received.

He wrote,

Dear SuperSpark,

My policy is to avoid receiving large amounts of cash at my place of business. I would advise my customer to do an EFT or to pay the cash directly into my business account at my bank. As my bank is an accountable institution and should report all cash greater than the threshold amount, is it then still necessarily for me to report this to the Financial Intelligence Centre?

Kind regards,

Peter

SuperSpark replies:

Dear Peter,

Let’ s look at the act and the duties of a reporting institution.

3.1 The following legal obligations are applicable to reporting institutions in terms of the FIC Act:

3.1.1 Registration with the Centre in terms of section 43B of the FIC Act;

3.1.2 Reporting of Cash Threshold Reports (CTR) to the Centre in terms of section 28 of the FIC Act; and

3.1.3 Reporting of Suspicious and Unusual Transaction Reports (STR) to the Centre in terms of section 29 of the FIC Act.

The fact that the costumer paid the money (in cash) into your bank account does not alleviate you from reporting the said transaction, if it exceeds the threshold amount of R24 999.99.

3.1.3 further refers to Suspicious and Unusual Transaction and this might even mean that if it was paid from an accountable institution but deemed suspicious or unusual it must be reported.

We recently had some of our members audited by FIC with accompanying fines as high as R1.4 m for not reporting amounts over the threshold amount. I strongly advise that you go back on your bank statements for the last five years and make sure that these amounts have been reported.

Got to fly..

Best until next time

Superspark