Would non-profits that sell R100 000 or more of a product be considered ‘accountable institutions’ under FICA, and therefore be required to register and comply with FICA regulations? Nicole Copley explains.
Schedule 1 to the Financial Centre Intelligence Act (FICA) was amended by Government Gazette 47596 on 29 November 2022, as part of the (unsuccessful) efforts to ward off threatened ‘grey-listing’ of South Africa for non-compliance with the Financial Action Task Force (FATF) standards. The amendments expand the list of people and businesses who are now ‘accountable institutions’ under FICA, with all of the additional paperwork and administration that this entails.
Classification as an ‘accountable institution’ requires that your business/organisation registers with FICA and performs the same document-gathering sort of due diligence which banks have been required to do (and have irritated us with) for the last long while.
On 5 February 2023 Luke Fraser, writing for BusinessTech.co.za, 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 refers to the opinion of and quotes Itzikovitz and Gunning of ENS Africa as saying that: ‘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.’
I have been asked, based upon this article, whether non-profits that sell R100 000 or more of, for instance, second-hand goods, would now be ‘accountable institutions’ under FICA.
I am pleased to report that a closer examination of the new item 20 in the amended Schedule shows that it is not quite as wide-ranging as could be understood from the Business Tech article.
Item 20, broken down into its 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, non-profit, 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; and
- 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 an NGO usually sells services, and happens to sell a car or other expensive piece of equipment, that one transaction (or intermittent transactions like this over time) will not suddenly make it an ‘accountable institution’. You have to be routinely selling things, as part of your usual, ongoing activities.
If you are a branch of Hospice or SPCA and total sales of second-hand goods in any period exceed R100 000, this does not make you an accountable institution. It is only if the organisation on an ongoing basis ‘deals in’ individual items worth over R100 000 that it will be an accountable institution.
So, car dealers and dealers in any equipment worth R100 000 or more will now be accountable institutions. Higher-end art dealers, too, will be accountable institutions. I am not so sure about bicycles, 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. Dealers in farm equipment, 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’.
But organisations which happens to sell something for R100 000 not as part of their usual business dealing can relax. And so can those whose funds come from the sale of second-hand goods; they will not be impacted by the change to Schedule 1.
Most popular in this section
Nicole Copley

Nicole has consulted to the NGO sector since 1993. She is an admitted attorney (non-practising), has her Masters in the tax exemption laws and is a Master Tax Practitioner. Nicole developed her drafting skills while working as a business lawyer, and she has a pragmatic problem-solving approach to all the work she does. Her depth and breadth of experience over many years and her work with government and a wide range of clients, give her useful perspective and insight. Nicole also lectures and trains on various topics of importance to the NGO sector. She is author of ‘NGO Matters: A practical legal guide to starting up’, and publisher of the series of NGO Matters handbooks.
Related articles
Top tips for preparing proposal budgets

The ABC’s of taxes in the non-profit sector

Acting outside your objects - Tax and other consequences
