The Financial Intelligence Centre Act 38 of 2001 (FICA) was implemented in South Africa to combat financial crimes, including money laundering, terrorist and proliferation financing i.e., the financing of weapons of mass destruction.. This statute places an obligation on banks and other financial services providers to verify and maintain accurate and current customer information. It emphasises the importance of banks knowing their customers (KYC compliance) in the ongoing effort to prevent financial crimes.
What does FICA compliance mean for you once you’ve emigrated from South Africa, and once you’ve become a non-resident for tax purposes? Let’s take a look at what you need to know.
What are the requirements for FICA compliance for individuals in South Africa?
Individuals have certain FICA-related obligations:
FICA Compliance – Customer Due Diligence (CDD):
- Providing identity information: When opening accounts or entering financial transactions with accountable institutions, you must provide accurate and up-to-date identity information, including official documents like your green bar-coded South African identity document or a Smart identity document card, passport, or driver’s licence.
- Verifying information: You will be asked to provide additional documents or undergo verification procedures to confirm your identity and source of funds, especially for high-value transactions that are deemed higher risk.
FICA Compliance – Cross-border transactions:
- Reporting threshold: If you send or receive money to or from South Africa that exceeds the R20 000 reporting threshold, it is important that you are aware of the fact that the transaction will be reported by your financial institution (bank) to the FIC.
- Monitoring transactions: It is your responsibility to be aware of the reporting threshold and keep record of your cross-border transactions. t
FICA Compliance – Suspicious activity:
- Cooperation with authorities: If approached by the FIC or any law enforcement agency regarding suspicious activity, it is your duty to cooperate fully and provide any requested information.
What are the key points of the Financial Intelligence Centre Act that expats need to know about?
For South African expats, the Financial Intelligence Centre Act (FICA) still applies in certain situations, even if you reside outside the country. Once you’ve emigrated, you need to be aware of the following key points:
Your financial activities are still subject to FICA:
- Cross-border transactions: If you send or receive money to/from South Africa exceeding the reporting threshold of R20 000, it will be subject to FICA reporting by your financial institution.
- Accounts held in South Africa: Even if you’re an expat, any accounts you hold with South African financial institutions remain subject to FICA regulations. This includes complying with KYC requirements.
- Business activities: If you conduct business or own companies in South Africa, they remain bound by FICA compliance, even if you’re abroad.
By understanding these key points and fulfilling your FICA responsibilities you can avoid your account with a financial institution being frozen due to FICA non-compliance. Even as an expat, it is important to maintain ethical financial conduct and adhering to FICA is one of the most important ways to ensure a smooth financial experience abroad.
Can you use a foreign address for FICA?
As South Africans, we are all familiar with the ‘proof of residence’ requirement. Generally speaking, FICA compliance requires accurate identification and verification of individuals and their financial activities within South Africa’s financial system.
South African financial institutions are obligated to comply with FICA regulations, which usually means verifying customer identities using reliable South African documents and addresses.
Depending on the specific circumstances and the accountable institution’s internal policies, there might be some flexibility for expats with unique situations.
Foreign individuals not residing within South Africa must provide proof of residence within their resident country (such as a bank account with address or a water or electricity account) but this will need to be certified and validly translated, if necessary.
If your stay abroad is temporary, and you’re overseas on a work assignment or for study purposes, you will have to provide your foreign address with supporting documentation like travel documents and expected return date.
Your best option is always to consult with your financial institution. Contact the specific accountable institution you’re dealing with and explain your situation directly. They can advise you on their internal policy requirements.
FinGlobal: cross-border financial specialists for South Africans
As a reputable financial services institution, we are regulated by South Africa’s Financial Sector Conduct Authority (FSCA) as a licensed Financial Services Provider (#42872).
For assistance with the migration of your finances, offshore investments, or international money transfers from South Africa, FinGlobal is a name you can trust. We are registered as an accountable institution with the Financial Intelligence Centre (FIC), which means that compliance will never be a worry for you.
Additionally, FinGlobal is also authorised to act as a Treasury Outsourcing Company by the Financial Surveillance Department of the South African Reserve Bank, so you can rest assured that your financial matters are in secure, compliant hands.
To find out more about our reliable cross-border financial services, please leave your contact details below and we’ll be in touch to discuss your unique requirements.