When your business closes a deal on high-value mining equipment or industrial machinery, Financial Intelligence Centre Act (FICA) compliance might not be front of mind—but it should be.

Since December 2022, any entity selling a physical item with an individual sales price of R100 000 or more, in either retail or wholesale, is classified as a High-Value Goods Dealer (HVGD). Many engineering and industrial suppliers still do not know this designation exists, which is where the compliance risk begins.

Under South Africa's FICA, these businesses become "Accountable Institutions" and are subject to the same requirements as banks, attorneys, credit providers and estate agents.

Why HVGDs Are Under Scrutiny
HVGDs attract regulatory attention because they are vulnerable to exploitation in money laundering or terror-related financing schemes.

While we often see criminals enjoying the spoils of their illicit activities by buying expensive cars, electronics and jewellery, HVGDs may also be used in much more creative ways.

As an example, criminals might look to exploit the legitimate need for expensive equipment in mining, construction and infrastructure projects across Africa. The sheer value of these transactions, where a single excavator or drilling rig can cost millions of rands, makes it easy to move large sums while maintaining the appearance of normal business operations.

A common tactic involves shell companies purchasing equipment with illicit funds, then either leasing them back to legitimate businesses, moving them cross border for sale or immediately reselling them at a loss, effectively converting dirty money into "clean" proceeds from equipment sales.

This is exactly why the sale or trade of an item valued at R100 000 or more for construction equipment or vehicles and industrial machinery sets off FICA compliance obligations.

What This Means for Your Business

• Once you have crossed that threshold, you are legally required to:
• Register with the Financial Intelligence Centre (FIC)
• Verify the identity of a client, whether an individual or legal person
• Check whether the client is sanctioned or politically exposed
• Report suspicious transactions or cash payments of R50 000 or greater to the FIC
• Maintain detailed records for at least five years
• Develop and implement a Risk Management and Compliance Programme that details all the processes in place to comply with FICA.
   

For a more comprehensive list of the obligations download the FICA FAQ guide.   

Non-compliance carries severe consequences. Businesses face penalties of up to R100-million, with potential criminal liability for directors and compliance officers. Beyond the financial hit, there is also reputational damage: being linked to money laundering investigations can devastate client relationships and tarnish years of business credibility.

FICA Compliance That Fits Your Operations
If you have just realised your business falls under HVGD requirements, immediate action is essential.

For many engineering and industrial suppliers, internal compliance expertise is limited, which makes technology-led compliance essential rather than optional.

This is where FICA compliance platforms like nCino KYC automate the heavy lifting for you through biometric authentication and verification, which validates selfies against ID documents and Department of Home Affairs records to confirm identity authenticity.

It also provides automatic and continuous screening, including sanctions and Politically Exposed Person (PEP) screening; and smart risk rating where it auto-fills risk ratings configured to your business to speed up your risk rating.

This automation is particularly valuable for businesses where compliance expertise may not exist in-house.

Beyond software, nCino KYC provides compliance advisory services, crucial support for industries new to full FICA compliance. This combination of technology and expert guidance helps businesses navigate the regulatory learning curve while maintaining focus on core operations.

Competitive Advantage    
Compliance is no longer optional, and the consequences of getting it wrong have never been more severe. As South Africa strengthens its anti-money laundering framework and regulators increase enforcement activity, FICA compliance is shifting from a regulatory burden to a business differentiator.

For engineering firms and industrial suppliers, robust compliance signals to customers, partners, and regulators that your business is professionally run and trustworthy.

nCino KYC takes the hours and complexity out of FICA compliance by giving your team the software and services to work faster, smarter, and with complete confidence.