A closer look at section 28 of the FIC Act

In South Africa, money laundering describes any activity in which money that originates from illegal activity is concealed. To combat this illegal process, South African law has implemented control measures aimed at assisting in its detection and investigation. 

The ins and outs of subject to bond approval clauses

These control measures are embodied in the Financial Intelligence Centre Act, 38 of 2001 (the FIC Act) and can be described as follows:

  • Individuals need to know who they are doing business with;
  • The financial paper trail of all transactions within a business need to be kept and preserved;
  • Suspected money laundering transactions need to be reported to the Financial Intelligence Centre. 

Let’s look at an example where an accountable institution has a duty to report a transaction to the Finance Intelligence Centre. 

Cash Payments

In terms of section 28 of the FIC Act, accountable institutions are obligated to report cash transactions in excess of R24 999.00. This threshold amount is currently under review and the proposal is that it be increased to R49 999.00, with a reporting timeframe of three days.

Cash is defined as “coin and paper money of the Republic or of another country that is designated as legal tender”.  It is therefore important to note that “cash” does not include transfer of funds by means of electronic funds transfer, wire transfer or any method that does not involve the physical transfer of cash.  

It is also important to note that accountable institutions are obligated to report cash payment aggregates of smaller deposits or payments that together exceed the cash threshold of R24 999.99. 

Should the accountable institution be required to report a transaction in terms of section 28, the report is to be filed electronically at fic.gov.za

Want more Snymans articles? Sign up for our monthly newsletter.

Follow Snymans on Facebook for more legal information, tips and news about property.

Recommended for you

Transfer and Bond Calculators
Legislative Guidelines

The Financial Intelligence Centre Act of 2001 and Cash Threshold Reporting[post_view before=""]

When does the reporting obligation arise for an accountable or reporting institution?

Read More
Minors and immovable property
Legislative Guidelines

The advantages of a life right[post_view before=""]

The Housing Development Schemes for Retired Persons Act 65 of 1988 introduced life rights as a formal form of ownership for retired people in South Africa. This legislation was implemented not only in response to the growth in the retirement village sector but also to provide legal protection to the elderly.

Read More
My name has changed - what happens to my property’s title deed?
Legislative Guidelines

Muslim marriages: A welcome Constitutional Court decision[post_view before=""]

In a long-awaited and groundbreaking decision in the area of family law, the Constitutional Court of South Africa (CC) confirmed the order of constitutional invalidity of the below mentioned Acts, granted by the Supreme Court of Appeal. This decision was confirmed on 28 June 2022.

Read More
Minors and immovable property
Legislative Guidelines

Selling a property without approved building plans[post_view before=""]

It’s often the case that a seller would like to sell – and a purchaser would like to buy – a property without approved building plans or an occupation certificate. But what does the law say?  In terms of the…

Read More
My name has changed - what happens to my property’s title deed?
Legislative Guidelines

The Divorce Act and marriage out of community of property without accrual[post_view before=""]

In this article, we explore the issue of the constitutional validity of section 7(3)(1) of the Divorce Act in respect of marriages entered into after 1 November 1984 and excluding the accrual system.

Read More

Need more Snymans content?

Sign up for our monthly newsletter.

A closer look at section 28 of the FIC Act

In South Africa, money laundering describes any activity in which money that originates from illegal activity is concealed. To combat this illegal process, South African law has implemented control measures aimed at assisting in its detection and investigation. 

The ins and outs of subject to bond approval clauses

These control measures are embodied in the Financial Intelligence Centre Act, 38 of 2001 (the FIC Act) and can be described as follows:

  • Individuals need to know who they are doing business with;
  • The financial paper trail of all transactions within a business need to be kept and preserved;
  • Suspected money laundering transactions need to be reported to the Financial Intelligence Centre. 

Let’s look at an example where an accountable institution has a duty to report a transaction to the Finance Intelligence Centre. 

Cash Payments

In terms of section 28 of the FIC Act, accountable institutions are obligated to report cash transactions in excess of R24 999.00. This threshold amount is currently under review and the proposal is that it be increased to R49 999.00, with a reporting timeframe of three days.

Cash is defined as “coin and paper money of the Republic or of another country that is designated as legal tender”.  It is therefore important to note that “cash” does not include transfer of funds by means of electronic funds transfer, wire transfer or any method that does not involve the physical transfer of cash.  

It is also important to note that accountable institutions are obligated to report cash payment aggregates of smaller deposits or payments that together exceed the cash threshold of R24 999.99. 

Should the accountable institution be required to report a transaction in terms of section 28, the report is to be filed electronically at fic.gov.za

Want more Snymans articles? Sign up for our monthly newsletter.

Follow Snymans on Facebook for more legal information, tips and news about property.