When Enforcement Overreaches: What A Recent FICA Judgment Means For Sanctions

A recent Gauteng High Court judgment has reaffirmed that regulatory enforcement and fair process must go hand in hand. The court upheld an appeal by Len Dekker Attorneys Incorporated against administrative sanctions imposed under the Financial Intelligence Centre Act (“FICA”), after finding that the Financial Intelligence Centre (“FIC”) had overreached in the way it had  calculated the penalty. At the centre of the case was a simple but significant question: could the FIC calculate sanctions by counting years of alleged non-compliance from before 19 December 2022, when it only became the supervisory authority for legal practitioners from that date? The court’s answer was no.

According to a Moneyweb report of 7 April 2026, the law firm had been sanctioned in an amount of close to ZAR235 000 for non-compliance with certain FICA provisions. The FIC’s approach was to include alleged non-compliance dating back to 2017. The High Court found that this had had  a material effect on the severity of the sanction and ordered that any recalculation of the administrative penalty be limited to the period from 19 December 2022 onwards. As noted in the judgment quoted by Moneyweb, the duration of the period relied upon by the FIC had a severe impact on the computation of the penalty.

These findings matter. It does not suggest that accountable institutions, including attorneys, can take a relaxed approach to anti-money laundering compliance. On the contrary, the court expressly recognised the need for strict adherence to FICA in order to prevent or identify money laundering and terrorist financing. But it also made it  clear that enforcement must remain proportionate and tied to the regulator’s actual powers during the relevant period. In other words, the judgment is not a retreat from compliance. It is a reminder that enforcement action must remain legally grounded.

The second aspect of the case is equally significant. Moneyweb reported that the High Court also found reviewable error in the FIC Appeal Board’s refusal to consider evidence of remedial steps taken by the firm after the finding of non-compliance, including its agreement with compliance service provider DocFox, now renamed nCino KYC. The court held that relevant remedial information had to be admitted and considered in any recalculation of the sanction. That too is important. It suggests that while remediation may not erase a breach, it remains relevant to the question of an appropriate and proportionate penalty.

The wider context helps explain why this case has drawn attention. In November 2024, the FIC announced that its Appeal Board had upheld a ZAR7.7 million sanction against Kunene Ramapala Incorporated for failing to comply with FICA requirements, including the duty to document, maintain and implement a risk management and compliance programme (“RMCP”) and to scrutinise clients against the targeted financial sanctions (“TFS”) list. At that stage, the FIC presented the outcome as a clear warning that non-compliance could have serious consequences. The Len Dekker matter does not undo that message. What it does do is place an important limit on how those consequences may be calculated and justified.

For legal practitioners and other accountable institutions, the judgment carries a sober lesson. Compliance with FICA remains non-negotiable. The statutory duties around risk management, sanctions screening and broader anti-money laundering (“AML”) controls are real, and regulators are plainly willing to enforce them. But the judgment also shows that enforcement powers are not unlimited. Sanctions must be imposed within the bounds of lawful authority, with proper regard to timing, relevance and proportionality.

In a regulatory environment shaped by South Africa’s greylisting experience and continuing pressure to demonstrate AML effectiveness, that balance is crucial. A strong compliance culture still matters. So does principled enforcement. The Len Dekker judgment is therefore not best understood as a setback for financial crime regulation, but as a reminder that credible enforcement depends not only on toughness, but on fairness and legal discipline.

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