The Financial Intelligence Centre (FIC) calls on all Designated Non-Financial Businesses and Professions (DNFBPs) to submit their outstanding Risk and Compliance Return (RCR) without further delay. The RCR requirement was issued through two directives in March 2023, namely Directives 6 and 7, yet many accountable institutions have not complied with the requirement.
In a recent media statement, the FIC announced significant progress in South Africa’s efforts to exit the Financial Action Task Force (FATF) grey list. However, the FIC emphasised that more work and urgency is needed to fully address the concerns raised by the FATF.
The FIC acknowledges the commitment and efforts of DNFBPs, which include legal practitioners, estate agents, trust service providers (including accountants), dealers in precious stones and metals, and other dealers in high value goods. These sectors have played a crucial role in advancing South Africa’s prospects of exiting the grey list. The submission of RCRs by these entities has been instrumental in improving the country’s risk assessment and compliance framework.
Despite the progress, the FIC highlights that the understanding of risk and compliance among DNFBPs remains a significant concern. The submission rates of RCRs, particularly by legal practitioners and estate agents are unsatisfactory. These two sectors are considered to be higher-risk DNFBPs sectors, and currently have an average RCR submission rate of around 70%.
The FIC advised that RCR submission rates across all DNFBPs must move closer to the 100% mark over the current quarter (April to June 2025) for the FIC to improve its risk-classification for each sector. Higher compliance levels will enable the FIC to identify and supervise high-risk entities more accurately, thereby strengthening the overall integrity of South Africa’s financial system.
Non-compliance by some DNFBPs negatively impacts the progress made by their peers. The FIC warns that without timely RCR submissions, the risk assessment and analysis of these sectors will remain incomplete. This could hinder South Africa’s efforts to exit the FATF grey list and maintain the robustness of the economy.
All DNFBPs must submit their outstanding RCRs as soon as possible. The platform for completion remains open on the FIC website.
Who must submit the RCR?
Directive 6 applies to the following sectors:
- Legal practitioners (item 1)
- Trust and company service providers (item 2)
- Estate agents (item 3)
- Gambling institutions (item 9)
Directive 7 applies to the following sectors:
- Credit providers (item 11)
- South African Post Bank (item 14)
- High-value goods dealers (item 20)
- South African Mint Company (item 21)
- Crypto asset service providers (item 22)
Do you need help completing your Risk and Compliance Return?
Masthead can help you implement and comply with FICA requirements. We can provide you with hands-on assistance, work through the return with you, give insight into the questions and guide you in completing your return. Click here for more information or contact us for more information and assistance.