8 Nov 2007
Who is affected?
All accountable institutions including estate agents, attorneys, banks, insurance companies. What is money laundering?
Money laundering is the process of manipulating the proceeds of crime in order to conceal the nature of its true source. Money that started out dirty will end up clean and any act in connection with any proceeds of crime, whether it is in the form of money or property or any other form can constitute a laundering offence.
Estate agents' duties under FICA FICA imposes the following four categories of duties on estate agents:-
The duty to establish and verify the identity of clients, commonly referred to as the "know-your-client-requirement"
* An estate agent may not establish a business relationship with a client unless the estate agent has taken the prescribed steps to establish and verify the identity of the client.
* The client will be the person who has given an estate agent a mandate.
* We believe that it is important to get as much information as possible at the mandate stage and inform the client as to what documentation is required.
* The client's identity must then be verified before the mandate is performed.
The duty to report suspicious transactions to FIC
* An automatic reporting duty relating to cash transactions and electronic transfers of money to or from the Republic in excess of the prescribed amount (not yet implemented).
* Reporting of suspicious or unusual transactions. This means the business believes it has received or is about to receive the proceeds of unlawful activities.
* Reporting of evasion or attempted evasion of a duty to pay a tax, duty or levy imposed by SARS.
* Reporting that a business has been or is about to be used in any way for money laundering purposes.
Submitting of report
* Electronically on the FIC website at www.fic.gov.za;
* Fax to FIC at (012) 315-5828; or
* Delivered to FIC at their offices in Pretoria at 14th Floor, 240 Vermeulen Street, Pretoria.
A report has to be submitted as soon as possible, but not later than 15 working days after the suspicion arose.
Internal Administrative Duties
* A duty to keep record of client's transactions for a period of 5 (five) years.
* A duty to formulate and implement internal rules to ensure compliance with the act.
* Duty to train staff.
* Duty to appoint a compliance officer to monitor compliance with the act.
In regards to point 1 to 4 above, your company will in most cases take care of the administrative duties as set out above.
Tipping Off Tipping off is a serious offence and you might be prosecuted. As a result, no tipping off is allowed.
Penalties for non-compliance Imprisonment for a period not exceeding 15 years or to a fine not exceeding ten million rand.
General guidelines to consider
Suspicion arises in our opinion if:-
Hints on reporting Continue with the transaction and continue to provide the same level of service that you usually would. Treat all clients with courtesy even if they refuse to answer your questions. Do not tip off and proceed to report the suspicious transaction in the prescribed manner.
The above should be seen as very brief comments on FICA and our interpretation thereof and should not be seen as an extensive guideline.