“The obligation to report in terms of section 28 of the FIC Act

 

2.1 The obligation to report in terms of section 28 of the FICA Act arises when transaction is concluded with a client by means of which cash in excess of the prescribed amount:

• is paid by the accountable or reporting institution to the client, or to a person acting on behalf of the client, or to a person on whose behalf the client is acting; or

• is received by the accountable or reporting institution from the client, or from a person acting on behalf of the client, or from a person on whose behalf the client is acting.

2.2 The obligation therefore extends to cash in excess of the prescribed amount being paid or received by the accountable or reporting institution.

2.3 Payment or receipt of cash includes paying or receiving cash in person as well as paying or receiving it via a third party.

 

Example 1: Motor Vehicle Dealers

 

The client of a motor vehicle dealer (MVD), XYZ Motors, elects to pay in cash after purchasing a motor vehicle from XYZ Motors for the amount of R28 500. The MVD has a strict no cash policy and requests the client to pay the cash into XYZ Motors’ bank account at ABC Bank. ABC Bank receives the cash amount of R28 500. ABC Bank is an accountable institution as listed in Schedule 1 to the FIC Act and has a reporting obligation in terms of section 28 of the FIC Act to report this transaction. XYZ Motors receives and peruses its bank statement or receives a bank deposit slip from the client which reflects the transaction that exceeded the prescribed threshold. XYZ Motors is a reporting institution as listed in Schedule 3 to the FIC Act. XYZ Motors “acquired knowledge” of the cash that went into its bank account and now has an obligation to report in terms of section 28 of the FIC Act. As a result this transaction will have to be reported to the Centre in terms of section 28 by both the motor vehicle dealer and the bank.

 

Example 2: Attorneys

 

The client of XYZ Attorneys, Z, elects to pay a cash amount as part of a transaction in the amount of R25 000 to XYZ Attorneys. XYZ Attorneys request the client to pay the cash into XYZ Attorneys’ trust account at ABC Bank. ABC Bank receives the cash amount of R25 000. ABC Bank is an accountable institution as listed in Schedule 1 to the FIC Act and has a reporting obligation in terms of section 28 of the FIC Act. XYZ Attorneys receives and peruses its bank statement or receives a bank deposit slip from the client which reflects the transaction that exceeded the prescribed threshold. XYZ Attorneys is an accountable institution as listed in Schedule 1 to the FIC Act. XYZ Attorneys “acquired knowledge” of the cash that went into its trust account and now has an obligation to report in terms of section 28 of the FIC Act. As a result this transaction will have to be reported to the Centre in terms of section 28 by both the attorneys firm and the bank.”