High Court limits FIC's power to backdate fines

In a judgment handed down on 25 March 2026, the High Court (Gauteng Division, Pretoria) ruled in Len Dekker Attorneys Inc v The Financial Intelligence Centre. This decision provides substantial relief to legal practitioners by bringing clarity and limits to the issue of retroactive FICA fines.

Background: A dispute over jurisdiction and time

During an inspection in mid-2023, the Financial Intelligence Centre (FIC) found Len Dekker Attorneys (LDA) non-compliant with core FICA requirements. This included failures to properly establish the Ultimate Beneficial Owner (UBO) of legal persons, conduct Sanction Screening, and maintain a valid Risk Management and Compliance Programme (RMCP).

Consequently, the FIC issued steep administrative penalties. To calculate the severity of the fine, the FIC measured the firm's non-compliance all the way back to 2017.

However, LDA argued this was unlawful. From 2017 to 18 December 2022, the Legal Practice Council (LPC) and its predecessor acted as the statutory supervisory body for attorneys. During those years the LPC accepted LDA’s compliance declarations and issued them Fidelity Fund Certificates (FFC’s), which effectively indicated that they were compliant.

The High Court's ruling: (In plain English)

The Court agreed with LDA, delivering a massive blow to the FIC's enforcement approach. The judgment established the following:

1. No retroactive fines before FIC takeover: The Court ruled that it is fundamentally unfair for the FIC to retrospectively penalise a firm for a period when another regulatory body supervised them and accepted their compliance. The Court ordered that any recalculation of administrative sanctions against LDA is strictly limited to the period from 19 December 2022 onwards, the exact date the FIC took over supervisory duties for attorneys.
2. Software adoption as a mitigating factor: Following the FIC's inspection, the firm signed a service level agreement with a compliance software provider to ensure future compliance. The FIC's Appeal Board initially refused to consider this contract as evidence to reduce the penalty. The Court ruled that the FIC must legally consider this software contract when determining the final penalty.

What does this ruling mean?

This ruling is a double-edged sword. On one hand, it safeguards your firm from being unfairly penalised for historic non-compliance during periods you were monitored by a different supervisory body.

On the other hand, the clock started ticking the moment the FIC became your direct supervisor. For legal practitioners specifically, that was December 2022. The FIC is conducting inspections and they will levy heavy fines for any compliance gaps from their takeover date forward.