Cash Transaction Report (“CTR”) Threshold Increases to R50 000
On 20 October 2022, and after careful consideration of the comments made on the draft amended Money Laundering and Terrorist Financing Control Regulations (“MLTFC Regulations”), the Minister of Finance, Mr. Enoch Godongwana (“the Minister”), approved the revision of the Cash Transaction Report (“CTR”) threshold for reporting cash transactions, as contained in the MLTFC Regulations.
Section 28 of the Financial Intelligence Centre Act, No. 38 of 2001 (“FICA”) creates a legal obligation on accountable and reporting institutions to report all cash transactions exceeding the prescribed CTR threshold. According to the amended MLTFC Regulations, the new CTR threshold will be R50 000 (fifty thousand rand), as opposed to the current CTR of R25 000 (twenty-five thousand rand), and will have come into effect on 14 November 2022. This means that all accountable and reporting institutions compiling the reports will be required to report any cash transactions of R50 000 or more to the Financial Intelligence Centre (“FIC”).
As of 14 November 2022, accountable and reporting institutions will be required to report all cash transactions exceeding the new prescribed threshold of R50 000 to the FIC within three business days, as opposed to two business days, from the date upon which the accountable or reporting institution becomes aware of such cash transactions.
Furthermore, the amended MLTFC Regulation has abolished the reporting on “CTR Aggregation”, which required an accountable and reporting institution to compile a report where a single client performs multiple transactions with a combined value of the prescribed CTR threshold to be reported to the FIC. According to the amendment, reporting on CTR Aggregation will no longer be a requirement, as transactions of such suspicious and unusual nature would be reportable in terms of Section 29 of the FICA.
Section 29 of the FICA provides that any person who carries on business, manages a business, is employed by a business, or who ought to reasonable know or suspect that suspicious and/or unusual transactions are being facilitated by such a business, or person of such a business, must report such suspicious and unusual transactions to the FIC within the prescribed period of becoming aware of such suspicious and unusual transactions.
Non-compliance with the provisions of Section 28, or any provision of the FICA for that matter, is an offense and is punishable in terms of Section 68 of the FICA. Such convicted persons could receive a penalty of imprisonment not exceeding a period of 15 years, or a fine not exceeding R100 million.
Irrespective of the amended MLTFC Regulations, any outstanding reports on CTR and CTR Aggregates were due to be submitted to FICA until 14 November 2022.