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Who stands to become an ‘accountable institution’ under amended Fica legislation?

Who stands to become an ‘accountable institution’ under amended Fica legislation?
Nicole Copley
By Nicole Copley
22 Feb 2023
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Amendments to Schedule 1 of the Financial Intelligence Centre Act have expanded the list of people and businesses who are now ‘accountable institutions’ under the legislation. What does this mean for nonprofits and smaller businesses selling goods?

As part of the efforts to ward off the threatened greylisting of South Africa for non-compliance with the Financial Action Task Force (FATF) standards, Schedule 1 of the Financial Intelligence Centre Act (Fica) was amended on 29 November 2022. 

The amendments, laid out in the Government Gazette 47596, expand the list of people and businesses who are now “accountable institutions” under Fica, with all of the additional paperwork and administration this entails. 

Classification as an accountable institution requires that your business registers with Fica and performs the same document-gathering due diligence that banks have been required to do (and have irritated us with). 

On 5 February 2023, Luke Fraser, writing for BusinessTech, stated: “Organisations that sell any items that total R100,000 or more to anyone in all forms of payments will be considered accountable institutions.”

He quotes Angela Itzikowitz and Era Gunning of law firm ENSafrica as saying: “Dealers in art, motor vehicles, equipment, scrap metal, and even bicycles and televisions will now be treated the same as banks and other financial institutions for purposes of Fica.”

Read in Daily Maverick: “‘Miracles’ needed to stop a deficient SA from being greylisted by global anti-terror financing watchdog”

As my work is in the nonprofit sector, I have been asked, based upon the BusinessTech article, whether nonprofits that sell R100,000 or more of, for instance, second-hand goods, would now be accountable institutions under Fica. 

A closer examination of the new item 20 in the amended Schedule 1 shows that it is not quite as wide-ranging as could be understood from the BusinessTech article.

Item 20, broken down into three component parts, includes as an accountable institution:


  • “A person who carries on the business of dealing in high value goods…

  • “in respect of any transaction where such a business receives payment in any form to the value of R100,000 or more (whether the payment is made in a single operation or more than one operation that appears to be linked)...

  • “where ‘high value goods’ means any item that is valued in that business at R100,000 or more.” (breaking down and brackets added by me)


So, for a business, nonprofit, person or any legal entity to become an accountable institution under item 20, all three of the following need to be satisfied:

  • The business is one which routinely sells “goods” (things, not services) as part of its business;

  • The business “deals in” things which are individually worth R100,000 or more; and

  • For the sale of any one of the things dealt in, payment of R100,000 is received (whether in one or more payments).


If your business or nonprofit usually sells services, and you happen to sell a car or other expensive piece of equipment, that one transaction (or intermittent transactions like this over time) will not suddenly make you an accountable institution. You have to be selling things routinely.

If you are a hospice or SPCA, and your sales of second-hand goods in any period exceed R100,000, this does not make you an accountable institution. It is only if your business or nonprofit deals in items worth more than R100,000 on an ongoing basis that it will be an accountable institution. 

Read in Daily Maverick: 

“Rushed legislation to strengthen financial oversight and avoid greylisting betrays a weakened law-making regime”

“Half of South Africa’s non-profit organisations failing to comply with legal requirements”

Car dealers and dealers in any equipment worth R100,000 or more will now be accountable institutions, as will higher-end art dealers.

I am not so sure about bicycle dealerships, unless you are regularly supplying to the very highest end of cyclists. And they would have to be much larger televisions than average for those who sell TVs to be hit. But dealers in farm equipment (a John Deere 504SD goes for R393,300), caravans, horse boxes, ski boats, irrigation systems and pumps, solar systems and medical equipment will more than likely find that they now have to follow the laws and regulations applicable to accountable institutions.

However, organisations that happen to sell something for R100,000, not as part of their usual business dealings, can relax. So can those whose funds come from the sale of second-hand goods. They will not be affected by the change to Schedule 1. DM/MC

A specialist legal consultant to the nonprofit sector for close on 30 years, Nicole Copley (BA, LLB, LLM-Tax) is a Master Tax Practitioner, lawyer, author and publisher of the ngoMATTERS series of practical guides for nonprofits. Copley is founder of ngoLAW: a one-stop, experienced, efficient support team for NGOs.

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