Motor Vehicle Dealerships: Seven key points to become fully FICA complaint

With the Financial Intelligence Centre Act (FICA) new Schedule 1 Amendments regarding motor vehicle dealers in place, a number of steps must be taken to ensure full FICA compliance.

In short, the changes include Motor Vehicle Dealers (MVDs) having to become Accountable Institutions instead of being just Reporting Institutions. These new measures are to ensure that vehicle dealers do not become a method of money laundering with ill-gotten gains.

There is more to FICA compliance than collecting and verifying documents. To be fully complaint, Accountable Institutions should comply with all obligations set out by the FIC.

Morningside Consulting and Training Group, a leading FICA compliance solutions provider, highlights the following obligations:

• Register with the FIC: 
• Accountable and Reporting Institutions are required to register with the Financial Intelligence Centre (FIC). Registration ca take place on the FIC’s goAML EE online system, which can be accessed via the FIC’s website www.fic.gov.za 
• Appoint an anti-money laundering | combating the financing of terrorism compliance officer:
• The senior management or board of directors of an Accountable Institution needs to formally appoint a compliance officer to ensure compliance with FICAA (financial Intelligence Centre Amendment Act). Ideally, the person appointed should have the competence and seniority to ensure the effectiveness of the accountable institution’s compliance function.
• Develop an RMCP:
• Accountable Institutions are required to apply a risk-based approach when establishing a business relationship and or conducting a single transaction with a client. Part of this risk-based approach includes developing controls that mitigate and manage the business’s antimony laundering risks and meet the FICAA requirements. All the controls developed and implemented should be documented to form part of the risk management and compliance programme (RMCP).
• Perform due diligence:

• Customer due diligence refers to the process of analyzing information about an individual or legal person from multiple sources to ensure your clients are who they say they are.
• It should also include verifying the identity of an individual or the registration of a legal person and this person’s address or location, obtaining information regarding the economic sector or occupation of your client: obtaining information about the nature of your client’s relationship with you; monitoring transactions; developing a risk-rating scheme to categorize your clients; checking data against third party data sources and identifying the source of funds.
• It also includes identifying whether your client, a related party, authorized person or Ultimate Beneficial Owner (UBO) is on a sanctions list or has appeared in any adverse media.
• Submit reports to the FIC:

• Both Accountable and Reporting Institutions are obligated to report any suspicious behavior or transactions to the FIC. This includes reporting any cash transactions in excess of the threshold of R49 999.
• Other types of reports that can be submitted are known as suspicious transactions or suspicious activity reports (STRs/SARs). These reports should be submitted when there is either a transaction or activity by the client that appears to be suspicious or unusual.
• Lasty, the fourth type of report that can be submitted is a terrorist property report (TPR). A TRR should be submitted when you think your client may possess or control property belonging to a client that could be linked to terrorism.
• Record keeping:

• FICAA enquires accountable institutions to keep records of not only the due diligence that was carried out but also details of any transactions that took place – including any counterparties to those transactions. This is to ensure that evidence is available should the FIC or the authorities require it for an investigation or prosecution.
• Records must be kept for at least five years. It can be in paper or electronic form – as long as it kept securely, safely, in confidence and is accessible by the FICAA compliance officer.
• Ongoing Training:
• According to section 43 of the FICAA, accountable institutions must provide ongoing training relating to AML/CFT with the purpose of complying with the provisions set out by the FICAA and its internal compliance with the Act.

The latest FICA Amendments (2025) may require changes to internal processes. Some of the key amendments include:

• The confirmation of a risk-based approach to customer due diligence which requires the identification and assessment of an institution’s money laundering and terrorism risks.
• Additional due diligence requirements for legal persons, trusts and partnerships.
• Ongoing due diligence and scrutiny of transactions during the course of a business relationship not just at the inception of the relationship.
• Additional obligation in relation to clients who hold prominent public or private sector positions, and
• Increased intervention power by the FIC and provision for warrantless searches in specified instances.

Morningside Consulting can advise you on your compliance strategy and we also offer an outsourced onboarding compliance solution which provides risk management and compliance programmes (RCMPs), ongoing staff training, due diligence and identification assessments from former regulators and industry leaders to enable reporting to the FIC.

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