Understanding Targeted Financial Sanctions (TFS) Under the FIC Act in South Africa

The FIC Act is clear: TFS obligations apply to all accountable institutions, not only banks. This includes:

No matter the size of your firm, you are legally required to build sanctions screening into your compliance processes.

South African firms must screen clients against both international and domestic sanctions lists. The most important sources are:

Because these lists are updated frequently, it is not enough to perform a single check when onboarding a client.

Sanctions screening must be ongoing, not just a box ticked at the start of a client relationship. Every new client should be screened at onboarding, but firms are also expected to re-screen at regular intervals. The frequency depends on your risk profile: high-risk clients may require monthly checks, while lower-risk clients can be reviewed annually.

Importantly, whenever unusual or suspicious transactions arise, the client should be screened again immediately. This layered approach ensures your firm is not inadvertently facilitating transactions on behalf of a sanctioned individual or entity.

This is often where confusion sets in. If your firm identifies a sanctioned person or entity in its client base, you are legally required to:

Crucially, you may not tip off the client. Alerting them to the fact that they are under investigation could itself constitute an offence.

In our work with firms, we often see the same mistakes repeated. Some firms assume sanctions screening is the same as filing a suspicious transaction report, while others believe their size exempts them from obligations. Another common oversight is treating screening as a once-off event instead of an ongoing process.

These gaps are not small. Even a single failure can trigger investigations, penalties, or sanctions notices — risks no reputable firm can afford.

To simplify TFS compliance, firms should focus on three priorities:

Affordable tools are available that allow smaller firms to perform screening without investing in costly banking-grade systems. The key is consistency.

Complying with TFS is about more than avoiding fines. It shows regulators, clients, and partners that your firm operates with integrity and resilience. It also protects your leadership team from personal liability, which can arise when directors or partners are found negligent in their compliance duties.

In short, a sound sanctions screening process strengthens both your regulatory standing and your reputation in the market.

Many firms only discover compliance weaknesses when it is too late — after receiving a notice of non-compliance, an audit finding, or even a financial sanction. A proactive approach is always less costly and less stressful.

To help firms identify gaps quickly, we developed a 2-minute FICA self-audit. It provides an instant compliance score and a clear path forward, without disrupting your existing processes.

Targeted Financial Sanctions are not optional and not limited to banks. They are a core obligation under the FIC Act for every accountable institution in South Africa. By embedding screening into your daily processes, documenting your efforts, and training your staff, you can reduce regulatory risk, protect your reputation, and focus on serving your clients with confidence.