Before we can onboard a client as a seller, purchaser, landlord or tenant, we request you provide us with information to allow us to do our due diligence in terms of FICA. We know this is a schlep, so sometimes we feel that FICA is a swear word, too (don't tell the authorities 😉).
Just a bit more about FICA and what is required from property practitioners in this regard:
FICA (Financial Intelligence Centre Act) is legislation in South Africa that aims to combat money laundering and terrorist financing. The Act imposes obligations on property practitioners to implement measures to prevent their services from being used for these illegal activities.
Here are the critical requirements that property practitioners need to comply with under FICA:
1. Registration with FIC: All estate agents and property practitioners must register with the Financial Intelligence Centre (FIC) and obtain a registration number.
2. Customer Due Diligence (CDD): Property practitioners must conduct CDD on their clients to verify their identity and assess their risk for money laundering or terrorist financing. This includes obtaining and verifying personal information
such as name, address, and identification documents. When a client is a trust, closed corporation or company, additional documents will be necessary – our obligation in FICA is to identify the natural persons behind the juristic person – essentially to “hit blood”.
3. Record Keeping: FICA requires property practitioners to keep records of all transactions and CDD information for at least five years.
4. Reporting Suspicious Transactions: If a property practitioner suspects a transaction or activity may be related to money laundering or terrorist financing, they must report it to the FIC immediately.
5. Appointment of a Compliance Officer: Property practitioners must appoint a Compliance Officer responsible for ensuring compliance with FICA and reporting any suspicious transactions to the FIC.
6. Training and Awareness: It is mandatory for property practitioners to undergo training on FICA and to keep themselves updated on any changes to the legislation.
7. Risk Management: Property practitioners must conduct regular business risk assessments and implement measures to mitigate identified risks.
Failure to comply with the requirements of FICA can result in severe penalties, including fines and imprisonment. Therefore, property practitioners must familiarise themselves with the legislation and ensure they fully comply with its requirements.