Submitting Cash Threshold Reports (CTRs) to the FIC is one of several regulatory reporting obligations for accountable and reporting institutions listed in FICA. Central to its mandate, the FIC interprets and analyses the regulatory reports it receives to develop financial intelligence for use by law enforcement and other competent authorities in their investigations, prosecutions, and applications for forfeiture of assets. Analysis of CTRs is important in helping to decipher possible underlying crime patterns and trends, as well as syndicated or cash-intensive criminal activity.
Section 28 of the FIC Act requires accountable and reporting institutions to report information on cash transactions exceeding the prescribed threshold to the FIC. The current threshold of R25 000 has been in operation since October 2010.
The requirements relating to CTRs have recently been revised in terms of the amendments to the Money Laundering and Terrorist Financing Control Regulations. The amendments come into effect on 14 November 2022.
Key changes:
- The prescribed amount of cash above which a transaction must be reported to the FIC in terms of section 28 of FICA has changed from R24 999.99 to R49 999.99, requiring that all transactions of R50 000 and more, must be reported.
- The number of days by which a CTR must be sent to the FIC has changed from two days to three days after the relevant person has become aware of the cash transaction.
- The requirement to report on CTR aggregation (CTRA) also known as a series of cash transactions has been removed. Currently, cash transactions where a single client has performed multiple transactions with a combined value of R25 000 and above within a defined period are reportable as one report to the FIC. With the revised regulations, this will no longer be a requirement. It is anticipated that the removal of the aggregation requirement will not negatively affect the generation of financial intelligence information, as split transactions that are suspicious and unusual would be reportable in terms of section 29 of the FIC Act.
Any outstanding reports that were due for submission to the FIC before the commencement of the amendments i.e. 14 November 2022 will still need to be submitted to the FIC based on the regulations applicable to that period. The CTRA report type will remain visible on the FIC’s registration and reporting system, goAML, to allow reporters to submit outstanding reports and to do remediations on CTRAs that might have been previously incorrectly submitted
What does this mean for Accountable and Reporting Institutions?
Accountable and Reporting institutions must make sure to update their reporting processes (or RMCP as applicable) to align with the revised requirements. A few areas to consider in terms of updating your CTR process.
- Your RMCP or reporting process must be updated to reflect:
- The change from R24 999.99 to R49 999.99 to ensure that all transactions of R50 000.00 or more are reported.
- An update the number of days by which a CTR must be sent to the FIC from two days to three days.
- Remove the requirement for aggregation CTR reporting.
- Staff awareness must be addressed by an appropriate training engagement to implement these changes into the business procedures and processes by 14 November 2022.
Remember to also review and update any client checklists or other client take-on documentation that is linked to the execution of your RMCP requirements.
To read the amendments, click here.
Get in touch with us if you need hands-on assistance to implement your FICA RMCP in your business. We can also assist with preparation for FIC Inspections and FICA Training for staff. Click here for our contact details.