---

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

Appeal Number: A267/2020

FIC Appeal Board Case No:12/3/1/5/HTl/fic/2/20

In the full court appeal between:

HARLYN TRADING INTERNATIONAL (PTY) LTD                                    APPELLANT

and

THE FINANCIAL INTELLIGENCE CENTRE                               FIRST RESPONDENT

THE DIRECTOR: ADV. ZOLISILE KHANYILE                    SECOND RESPONDENT

JUDGMENT

BASSON J

INTRODUCTION

[1]            The appellant (Harlyn Trading International (Pty) Ltd – Harlyn) is a family-owned business managed by a husband and wife.  It has been in the business of selling pre-owned trucks since 1998.

[2]            The first respondent (the Financial Intelligence Centre – the FIC) conducted an inspection at Harlyn in November 2018 whereafter and on 13 June 2019 it issued a notice of intention to impose an administrative sanction on Harlyn for its failure to, firstly, register as a reporting institution (Harlyn ought to have done so by March 2011) and, secondly, to report 75 Cash Threshold Transactions (CTRs) amounting to R12 789 481.66 within 2 business days of each transaction having taken place.  The reporting must be done by filing a Cash Threshold Transactions Register with the FIC. It is common cause that Harlyn failed to do so.  Harlyn only registered on 18 June 2019.

THE PROCESS FOLLOWED

[3]            When the notice was issued on 13 June 2019, it indicated that the FIC considered imposing a financial penalty.  At that stage the precise amount of the penalty was not indicated.  It only indicated that the maximum penalty that the FIC would consider was R 12 789 481.66 which is the value of the unreported cash transactions.  Harlyn was invited to make representations by 10 July 2019.

[4]            Harlyn did not submit its submissions within the deadline and was granted three extensions by the FIC to do so.  Only on 18 October 2019, when Harlyn finally made its representations, did it raise several mitigating factors such as that it had now commenced the process of reporting the outstanding cash transactions.  According to the FIC’s goAML system, Harlyn only started remediating these transactions between 13 and 19 October 2019 which was almost a year after the initial inspection report.

[5]            Upon receipt of Harlyn’s representations, the FIC contended that it reconsidered the matter in light of the factors listed in section 45C(2) of the Financial Intelligence Act[1] (FICA).  The FIC recommended to the second respondent (Adv. Xolisile Khanyile – the director) that a financial penalty of R1 278 948.00 be imposed: half was payable immediately and the balance was conditionally suspended for three years.

[6]            In the final assessment, the FIC considered the proposed sanction taking into account all the documentation.  The director agreed with the proposed sanction.

[7]            On 10 December 2019 the FIC issued the notice of sanction and the reasons therefor.  According to the FIC, after having considered the mitigating factors and the other factors set out in section 45C(3), the administrative penalty was an effective 5% (in that half of the penalty was suspended) of the value of the unreported cash transactions.

[8]            Harlyn appealed to the Appeal Board and challenged, inter alia, FIC’s use of its sanctioning guidelines.  The Appeal Board dismissed Harlyn’s appeal.  The present appeal is against the Appeal Board’s decision.

PENALTY IMPOSED

[9]            The FIC ultimately imposed a financial penalty of R1 278 948.00, which was 10% of the unreported cash transactions.  It suspended half of this penalty for three years.  This reduced Harlyn’s penalty to R644 474.00, which was to be paid in six equal monthly instalments.  (As already pointed out the effective administrative penalty is thus 5% of the value of the unreported CTRs.)

[10]        The Appeal Board dismissed the appeal and confirmed the order that Harlyn must pay the financial penalty in the amount of R 644 474.00 (together with the R  5 000 penalty for failure to register) in six equal monthly instalments commencing on 30 January 2021.

[11]        This is an appeal by Harlyn in terms of section 45D of FICA against the administrative sanction imposed by the FIC as confirmed by the Appeal Board for its non-compliance with the registration and reporting obligations.

THE APPELLANT’S CASE

[12]        Throughout these proceedings, Harlyn maintained that it was not aware of its obligation to register and/or reporting duties in terms of FICA.  It was only after it was alerted to the application of FICA that Harlyn’s personnel underwent training whereafter it had introduced internal procedures and registered as a reporting institution with the FIC.  Harlyn only managed to register on 20 June 2019 after various unsuccessful attempts to register.  It places the blame for the difficulties to register squarely on the shoulders of the FIC.

[13]        Harlyn submitted that it endeavoured as far as it could to register the CTR transactions identified by the FIC from its bank account.  It is not in dispute that 75 CTR transactions were identified.  Harlyn was able to report the majority of these transactions but for 22 transactions that were rejected.  Harlyn submitted that it did attempt to obtain further and better information but was unable to do so as the telephone numbers of the purchasers who purchased the trucks identified as CTRs were no longer correct or available and that they were unable to trace some of the transactions because some took place as far back as 9 May 2013.

PURPOSE OF FICA

[14]        The Legislature enacted FICA to combat the serious combined threats of money laundering and terrorist financing.[2]  FICA introduced a risk-based response to these threats which fundamentally relies upon information (or intelligence) gathered through mandatory due diligence, record keeping, and reporting obligations.[3]  FICA is an important lynchpin in South Africa’s response to the global threats of money-laundering and terrorist financing.  However, the efficacy of the entire system is undermined when participants ignore their reporting obligations and/or fail to comply with them.

[15]        FICA identified businesses dealing in motor vehicles — such as the appellant  — as “reporting institutions”.[4]  This is because motor vehicle dealers are considered to be susceptible to being used to facilitate money-laundering.  FICA accordingly put into place registration and reporting obligations upon such institutions.

THE GROUNDS FOR THE APPEAL

[16]        In considering an appropriate penalty, the FIC recommended a financial penalty calculated at 10% of the value of the unreported reportable transactions.  This “mathematical tool” of 10% has its origins in a manual and guidelines compiled by the FIC for its supervisory bodies which include the Financial Services Board, the Registrar of Companies, the South African Reserve Board and others.  This manual explains concepts of money laundering and explains that the FIC or other supervisory bodies may impose an administrative sanction on any accountable institution.

[17]        More in particular to the FIC, the court was referred to the FIC’s “FINANCIAL SANCTIONING CRITERIA”.  In terms of this document, FIC, when exercising its discretion to impose a financial sanction in the form of a financial penalty in terms of section 45C(3)(e) of FICA on an institution whose non-compliance is serious and extensive, will consider certain “baseline” penalties.  In the case of negligent non-compliance, a baseline penalty of R 5 000.00 is imposed and for the late or non-reporting transgression 10% of the value of the transactions not so reported or reported late.  Provision is made for higher baseline criteria in the case of gross negligent non-compliance and wilful non-compliance.  In respect of these criteria, the FIC explained to the court that these criteria are merely a mathematical tool utilised by the FIC once it has determined the degree of culpability of the non-compliant institution.  Further, once the financial penalty has been calculated, the final quantum of the penalty is adjusted by the FIC to reflect any compelling proven mitigating factors as presented by the non-compliant institution which may include conditionally suspending an appropriate portion thereof.

[18]        Harlyn takes issue with the application of this “mathematical tool” by the FIC as a method of calculating the sanction as a violation of section 45C(2) of FICA and submitted that the policy, which imposes a 10% sanction in respect of each unreported CTR transaction as the starting point, does so regardless of the circumstances of the case.  It further submitted that this approach also ignores the provisions of section 45C(2) of FICA and that the FIC paid lip service to the important mitigating factors such as that this was the first time that Harlyn was inspected; the fact that it was not aware of its reporting duties, and that it gave its full co-operation and it experienced difficulties with the registration process.

[19]        The main thrust of Harlyn’s criticism is therefore levelled against the imposition of the financial penalty of 10% on the value of the unreported CTRs, which Harlyn submitted resulted in a “foregone conclusion” because the penalty imposed on Harlyn remained at 10%.  Harlyn further submitted that the FIC had failed to consider the alternative administrative sanctions provided for by FICA such as a reprimand or a directive to take remedial action or to make specific arrangements.  Instead, the FIC elevated the none reporting of more than 10 CTRs into an automatic penalty of 10% of the value of the CTRs.  It further submitted that the Appeal Board should not have imposed such an excessive sanction particularly because the FIC was not hindered in their duties nor was there an injustice caused or an increased risk in respect of terrorist activities or money laundering.

[20]        Harlyn lastly submitted that this court should substitute the financial penalty by varying the financial penalty to impose a financial penalty of R 300 000.00 of which R  100 000.00 is immediately payable and the remainder suspended for a period of 3  years on condition that Harlyn remain fully compliant with their obligations in terms of FICA.

THE PROVISIONS OF THE FICA

[21]        Section 45C of FICA reads as follows:

“45C  Administrative sanctions —

(1)    The Centre or a supervisory body may impose an administrative sanction on any accountable institution, reporting institution or other person to whom this Act applies when satisfied on available facts and information that the institution or person —

(a)     has failed to comply with a provision of this Act or any order, determination or directive made in terms of this Act;

(b)     has failed to comply with a condition of a licence, registration, approval or authorisation issued or amended in accordance with section 45 (1B) (e);

(c)     has failed to comply with a directive issued in terms [of] section 34 (1) or 43A (3); or

(d)     has failed to comply with a non-financial administrative sanction imposed in terms of this section.

(2)    When determining an appropriate administrative sanction, the Centre or the supervisory body must consider the following factors:

(a)     The nature, duration, seriousness and extent of the relevant non-compliance;

(b)     whether the institution or person has previously failed to comply with any law;

(c)     any remedial steps taken by the institution or person to prevent a recurrence of the non-compliance;

(d)     any steps taken or to be taken against the institution or person by —

(i)    another supervisory body; or

(ii)   a voluntary association of which the institution or person is a member; and

(e)     any other relevant factor, including mitigating factors.

(3)    The Centre or supervisory body may impose any one or more of the following administrative sanctions:

(a)     A caution not to repeat the conduct which led to the non-compliance referred to in subsection (1);

(b)     a reprimand;

(c)     a directive to take remedial action or to make specific arrangements;

(d)     the restriction or suspension of certain specified business activities; or

(e)     a financial penalty not exceeding R10 million in respect of natural persons and R50 million in respect of any legal person.

(4)   The Centre or supervisory body may—

(a)   in addition to the imposition of an administrative sanction, make recommendations to the relevant institution or person in respect of compliance with this Act or any order, determination or directive made in terms of this Act;

(b)   direct that a financial penalty must be paid by a natural person or persons for whose actions the relevant institution is accountable in law, if that person or persons was or were personally responsible for the non-compliance;

(c)   suspend any part of an administrative sanction on any condition the Centre or the supervisory body deems appropriate for a period not exceeding five years.

(5)   Before imposing an administrative sanction, the Centre or supervisory body must give the institution or person reasonable notice in writing—

(a)   of the nature of the alleged non-compliance;

(b)   of the intention to impose an administrative sanction;

(c)   of the amount or particulars of the intended administrative sanction; and

(d)    that the institution or person may, in writing, within a period specified in the notice, make representations as to why the administrative sanction should not be imposed.

(6)       (a) After considering any representations and the factors referred to in subsection (2), the Centre, subject to paragraph (c), or supervisory body may impose an administrative sanction the Centre or supervisory body considers appropriate.

(b)   Upon imposing the administrative sanction the Centre or supervisory body must, in writing, notify the institution or person—

(i)    of the decision and the reasons therefor; and

(ii)   of the right to appeal against the decision in- accordance with section 45D.

(c)   The Centre must, prior to taking a decision contemplated in paragraph (a), consult the relevant supervisory body, if applicable.

(7)        (a) Any financial penalty imposed must be paid into the National Revenue Fund within the period and in the manner as may be specified in the relevant notice.

(b)   If the institution or person fails to pay the financial penalty within the specified period and an appeal has not been lodged within the required period, the Centre or supervisory body may forthwith file with the clerk or registrar of a competent court a certified copy of the notice contemplated in subsection (6) (b), and the notice thereupon has the effect of a civil judgment lawfully given in that court in favour of the Centre or supervisory body.

(8)   An administrative sanction contemplated in this section may not be imposed if the respondent has been charged with a criminal offence in respect of the same set of facts.

(9)   If a court assesses the penalty to be imposed on a person convicted of an offence in terms of this Act, the court must take into account any administrative sanction imposed under this section in respect of the same set of facts.

(10)    An administrative sanction imposed in terms of this Act does not

constitute a previous conviction as contemplated in Chapter 27 of the Criminal Procedure Act, 1977 (Act 51 of 1977).

(11) Unless the Director or supervisory body is of the opinion that there are exceptional circumstances present that justify the preservation of the confidentiality of a decision the Director or supervisory body must make public the decision and the nature of any sanction imposed if—

(a)   an institution or person does not appeal against a decision of the Centre or supervisory body within the required period; or

(b)   the appeal board confirms the decision of the Centre or supervisory body.”

THE GUIDELINES

[22]        As already mentioned, Harlyn took issue with the fact that the FIC devised a set of guidelines to assist in exercising its discretion to impose an administrative sanction in the form of a financial penalty as it, according to Harlyn, unduly fetters the discretion afforded to the FIC in terms of section 45C (2) of FICA.

[23]        This is disputed by the FIC who persistently submitted that the “mathematical tool” is merely a guideline and nothing more.  The Appeal Board also considered this submission in its judgment and, with reference to the decision in Mit Mak Motors CC v The Director: The Financial Intelligence Centre and Another,[5] stated as follows:

“[32] The criterion set out in paragraph 58 of the Centre’s answering affidavit was merely used as a guideline in the sanctioning process.

[33] There was neither a mechanical application thereof, abdication nor unlawful dictation resulting in a failure by the administrative functionary to exercise a public power properly reposing in her.

[35] We are thus satisfied that the “tool” was not applied mechanically in casu but only as a guideline since the Centre had proper regard to the factors enumerated in section 45(C)(2) prior to the imposition of the administrative action.

[36] Guidelines and parameters within which an administrative functionary ought to exercise her discretion are commonplace in our legal system.”

[24]        Regarding the principle of setting guidelines for the imposition of a sanction: I am not persuaded that, firstly, the FIC is not permitted to set such guidelines, nor secondly, that the mere setting of guidelines, and more in particular, the setting of a “mathematical tool” as a guideline, in any way fetters the discretion of the FIC from considering the mitigating factors tendered by the parties.  In terms of section 45C(2) of FICA, five possible administrative sanctions are identified that the FIC “must” consider in the exercise of its discretion in respect of an appropriate sanction.  The FIC explained that the guidelines are there to assist the FIC in calculating the quantum of the financial penalty but only after the degree of culpability has been established. As already pointed out, in the case of negligent non-compliance (for example) where the party did not have prior knowledge of its compliance obligations, the guidelines propose, as a baseline penalty, a penalty of 10% of the value of the transactions not reported.  There is no indication from the papers that the FIC is bound by these guidelines in the sense that it is not able to depart from this baseline: these guidelines are therefore merely used as a point of departure when the FIC assesses a particular matter.  It was also submitted on behalf of the FIC that the quantum of the financial penalty is assessed and adjusted to properly reflect the peculiar circumstances of the case as well as the mitigating factors presented to the FIC.  Finally, the FIC submitted that the mathematical tool allows for consistency in the broader exercise of the FIC’s sanctioning discretion by providing it with a starting point but that this does not preclude the consideration of mitigating factors.

[25]        The guidelines are therefore designed to achieve proportionality between the ultimate penalty and the extent of non-compliance.  The maximum penalty authorised is R50 million for a juristic person which means that any amount below R50 million is a competent financial administrative penalty.  Although the guidelines set certain baselines, the imposition of the proposed baseline would not necessarily be proportional to the non-compliance hence the discretion of the FIC to adjust the quantum as it did in fact do in this matter.

[26]        If regard is had to the present matter: although the baseline of 10% was proposed as a sanction, the ultimate recommendation was to suspend half of the amount and order payment of the amount in six instalments which in itself shows that the FIC and the Appeal Board had applied its discretion in respect of an appropriate sanction.  This is reflected in the ultimate order imposing a financial penalty of R  5  000.00 for failing to register with the FIC and a financial penalty of R  1 278 948.00 (10% of the value of the unreported CTRs) for failing to report 75  CTRs of which 50% is payable with the balance conditionally suspended for three years.  In addition, the director imposed a caution not to repeat the conduct that led to the non-compliance and a directive to remedy the outstanding transactions.  The FIC also submitted that the actual payable amount of the sanction was considerably reduced to R 639 474.00.

[27]        It was further submitted on behalf of the FIC that the penalty so imposed is not startlingly inappropriate.

WHEN WILL A COURT INTERFERE WITH A DISCRETION?

[28]        The power of FIC to impose a financial penalty and determine the quantum of that penalty is a true discretion which flows from the provisions of section 45C(1)(a) of FICA which states that the FIC:

“… may impose an administrative sanction on any accountable institution, reporting institution or other person to whom this Act applies when satisfied on available facts and information that the institution or person … (a) has failed to comply with a provision of this Act or any order, determination or directive made in terms of this Act …”

[29]        Section 45C(2) sets out the factors which the FIC must consider in determining an appropriate administrative sanction.  The FIC is enjoined by virtue of the word “must” along with the conjunctive “and” to consider all the factors in section 45C(2)(a) to (e).  Section 45C(3) permits the FIC to impose a range of administrative sanctions.  These include a financial penalty not exceeding R10 million in respect of natural persons, and R50 million in respect of juristic persons.[6]  Section 45C(4) permits the FIC to take additional steps in respect of the administrative penalty.  In particular, section 45C(4)(c) permits the FIC to suspend any part of the administrative sanction for a period not exceeding five years and on any condition that the FIC deems appropriate.  Section 45D provides for an appeal procedure.  The appeal is considered by an Appeal Board established under section 45E.  Appeals are decided on the written evidence, factual information, and documentation which served before the FIC when it took its decision.[7]

[30]        The Appeal Board’s powers are furthermore narrow as appears from the provisions of section 45D(7) of FICA.  The Appeal Board may:

“(a) confirm, set aside or vary the relevant decision of the Centre or supervisory body; or

(b)  refer a matter back for consideration or reconsideration by the Centre or supervisory body concerned in accordance with the directions of the appeal board.”

[31]        The discretion accorded to the FIC and by extension, the Appeal Board, is thus a discretion in the true sense and is so because there are a wide range of equally permissible options available to the FIC and anyone or a combination of those options would be within the FIC’s powers.[8]  Given the discretionary nature of this power, a court is not at liberty to interfere at will.  Put differently, a court can neither (i) impose its opinion as to what is appropriate, nor (ii) interfere with the sanction simply because it may have imposed a different sanction.  As stated by the court in Florence v Government of the Republic of South Africa: [9]

“[113] Where a court is granted wide decision-making powers with a number of options or variables, an appellate court may not interfere unless it is clear that the choice the court has preferred is at odds with the law. If the impugned decision lies within a range of permissible decisions, an appeal court may not interfere only because it favours a different option within the range. This principle of appellate restraint preserves judicial comity. It fosters certainty in the application of the law and favours finality in judicial decision-making.”

[32]        A court therefore does not have the power to substitute its value judgment for the FIC’s or the Appellate Board’s in the absence of (i) a mistake of fact, (ii) a mistake of law, or (iii) evidence that the discretion was not exercised judiciously.  The reason for this limitation is explained by the Constitutional Court in Trencon:[10]

“[44] It is unsurprising that this court in Bato Star accepted Professor Hoexter's account of judicial deference as —

'a judicial willingness to appreciate the legitimate and constitutionally-ordained province of administrative agencies; to admit the expertise of those agencies in policy-laden or polycentric issues; to accord their interpretations of fact and law due respect; and to be sensitive in general to the interests legitimately pursued by administrative bodies and the practical and financial constraints under which they operate. This type of deference is perfectly consistent with a concern for individual rights and a refusal to tolerate corruption and maladministration. It ought to be shaped not by an unwillingness to scrutinise administrative action, but by a careful weighing up of the need for — and the consequences of — judicial intervention. Above all, it ought to be shaped by a conscious determination not to usurp the functions of administrative agencies; not to cross over from review to appeal.'

[45] Judicial deference, within the doctrine of separation of powers, must also be understood in the light of the powers vested in the courts by the Constitution. In Allpay II, Froneman J stated that —

'(t)here can be no doubt that the separation of powers attributes responsibility to the courts for ensuring that unconstitutional conduct is declared invalid and that constitutionally mandated remedies are afforded for violations of the Constitution. This means that the Court must provide effective relief for infringements of constitutional rights.

. . .

Hence, the answer to the separation-of-powers argument lies in the express provisions of section 172(1) of the Constitution. The corrective principle embodied there allows correction to the extent of the constitutional inconsistency.'

[46] A case implicating an order of substitution accordingly requires courts to be mindful of the need for judicial deference and their obligations under the Constitution. As already stated, earlier case law seemed to suggest that each factor in the exceptional circumstances enquiry may be sufficient on its own to justify substitution. However, it is unclear from more recent case law whether these considerations are cumulative or discrete.”

[33]        The court in Trencon also recognised that substitution of an administrative decision will only be made in exceptional circumstances in light of the fact that the administrator is best equipped by virtue of its composition, expertise, experience and access to sources of relevant information, to make the right decision.

SHOULD THIS COURT INTERFERE?

[34]        Are there facts before this court warranting this court to conclude that the discretion exercised by FIC was not judiciously exercised?  As was stated by the court in Florence:[11]

“[114] However, when a court of first instance, even though vested with a strict or true discretion, has not acted in a judicial manner, an appeal court may intrude to ensure a lawful and just outcome. The intervention would be in the interests of justice as the appeal court imposes fidelity to the law. The appellate court would be doing no more than correcting an instance where —

'the court has exercised its statutory power capriciously or was moved by a wrong principle of law or an incorrect appreciation of the facts, or has not brought its unbiased judgment to bear on the issue, or has not acted for substantial reason.'”

[35]        Bearing in mind that the question on appeal is not the correctness of the decision, the question is whether the FIC (and the Appeal Board) “… did not act judicially …, or based the exercise of that discretion on wrong principles of law, or a misdirection on the material facts,”[12] or “committed some demonstrable blunder,”[13] rendering the sanction startlingly inappropriate.  Also, can it therefore be concluded that the sanction is so severe that it elicits a sense of shock or disbelief.[14]

[36]        To recap the grounds of appeal before the court: Harlyn in essence attacked the use of the mathematical tool.  In this regard I have already pointed out that the mere fact that there is a guideline which sets as a baseline a 10% penalty in respect of the unreported CTRs is not per se unlawful.  The ultimate question is whether the FIC and the Appeal Board took a decision in circumstances where there was (i) an error of fact; (ii) an error of law or (iii) the discretion was not judicially exercised.

[37]        I am not persuaded that there exist grounds to interfere with the decision.  I am in agreement with the submission that section 45C of FICA, properly construed, requires the FIC to have formed a view about (i) its intention to impose an administrative sanction and (ii) the amount or particulars of that sanction before it invites representations.[15]  The FIC’s preliminary view does not render it a foregone conclusion that a financial penalty will be imposed.  This is also borne out by the fact that Harlyn was informed of the decision to impose a penalty but without having stipulated the quantum.

[38]        Section 45C contemplates three stages in instituting an administrative sanction: firstly, the FIC must satisfy itself that a breach has indeed taken place.  This jurisdictional determination must be made in terms of section 45C(1) which must be satisfied before determining the appropriate sanction.  In the second stage, the FIC is required to form a prima facie view about whether to implement an administrative sanction for that breach and if so, what that sanction should be.  The FIC will thereafter communicate the view to the affected party and invite representations.  Thirdly, the FIC will determine the appropriate sanction and “must” do so having regard to the factors in section 45C(2) and the options available to it as set out in section 45C(3) and (4) of FICA.  I have already indicated that the use of mathematical tools is used as a guideline which does not preclude the FIC from considering the mitigating factors presented, as section 45C(2) requires.  The tool is utilised only once the FIC has determined the degree of culpability of the non-compliant institution as evidenced by the facts of each case.  As already pointed out, the FIC conditionally suspended half of the penalty.  The end result is that Harlyn is only required to pay an effective 5% of the total value of unreported transactions. 

[39]        The Appeal Board has endorsed the implemented criteria and has recognised that the FIC uses it as a guideline.  In this regard the following was stated in Hyde Park Auto (Pty) Ltd t/a Sandton Auto and Financial Intelligence Centre:[16]

“[12]     The Centre uses a guideline for imposing sanctions.  The guideline differs from the ones that were the subject to criticism in decisions of the Appeal Board because it now provides for a baseline – and not an inflexible tariff  – and the guideline takes account of the degree of fault.  In other words, since the guideline is merely a guideline and not a tariff it is a useful tool to ensure more or less equal treatment of those who are subject to a sanction having failed to comply with registration or reporting obligations.”

[40]        In respect of the contention that the FIC had ignored the mitigating factors, the only evidence Harlyn tenders for this assertion is that the penalty imposed remained at 10% of the value of the unreported cash transactions.  This is incorrect as this contention does not consider the fact that half of the penalty was suspended.  In other words, the effective penalty is 5%.  This contention also does not consider the fact that the FIC imposed a payment plan to mitigate the adverse impact of the administrative sanction.

[41]        Harlyn’s main argument was that it was unaware of its reporting obligations.  From the papers it appears that the FIC gave Harlyn the benefit of the doubt and accepted this version unquestioningly hence the imposition of a sanction that is regarded by FIC as falling within the category of having been negligent.

[42]        I am not persuaded that the FIC committed an error of fact or law nor that it exercised its discretion injudiciously.  I am also unable to find that the imposition of the administrative sanction was in any way startlingly inappropriate.  This is in conclusion not a matter where there exist grounds for this court to interfere with the discretion of the FIC and ultimately the Appeal Board.

[43]        In the premises the application is dismissed with costs.

AC BASSON

JUDGE OF THE HIGH COURT

GAUTENG DIVISION OF THE HIGH COURT, PRETORIA

I agree

VP NONCEMBU

ACTING JUDGE OF THE HIGH COURT

GAUTENG DIVISION OF THE HIGH COURT, PRETORIA

Delivered:  This judgment was prepared and authored by the Judge whose name is reflected and is handed down electronically by circulation to the Parties/their legal representatives by email and by uploading it to the electronic file of this matter on CaseLines.  The date for hand-down is deemed to be 20 September 2021.

APPEARANCES

For the Applicant:                                         ADV. RF DE VILLIERS

Instructed by:                                                Deneys Zeederberg Attorneys

For the Respondent:                                   ADV. M SIBANDA

Instructed by:                                                Tshisevhe Gwina Ratshimbilani Inc

Date of hearing:                                           27 July 2021

Date of judgment:                                        20 September 2021

[1] 38 of 2001.

---