31. FICA – Financial Intelligence Centre Act

In terms of Section 1 of the Financial Intelligence Centre Act (FICA) 38 of 2001 an ‘accountable institution’ means a person referred to in Schedule 1. Schedule 1 lists an estate agent as defined in the Estate Agents Act, 1976 (Act 112 of 1976) as an accountable institution. Therefore, all estate agents are obliged to comply with the FICA rules as set out in the Act and the regulations.

1. Identity verification and establishment 

In terms of Section 2 of the regulations to the Act, “no accountable institution may knowingly establish or maintain a business relationship or conduct a single transaction with a client who is entering into that business relationship or single transaction under a false name.”

Verification entails comparing the documents provided by the person with the person. It is imperative that estate agents verify their clients. This would apply to all employees as well.

1. Required Documentation 

Different documentation is required depending on the type of client an estate agent is dealing with, whether natural or legal.

Natural persons: 

• ID – including photo, name and surname, id number, date of birth.
• Date of birth – as per above.
• ID number – as per above.
• SARS verification – registration document verifying registration with SARS. (If not registered, at least an explanation as to why they are not registered. SARS requires all persons earning R70 700 annually to be registered for tax.)
• Proof of residence.

Legal persons:

• Certificate of Incorporation – CM1.
• Notice of Registered Office and Postal Address – CM22.
• If a CC most recent Founding Statement and Certificate of Incorporation – CK1.
• Or Amended Founding Statement – CK2.
• Registration number of Company or CC.
• Registered Address of the Company or CC.
• Trading name.
• Address from which the Company or CC conducts business.
• Income tax and VAT numbers.
• Persons holding a 25% or more voting right must supply FICA documents.

1. When must documents be acquired? 

According to the internal rules of the Estate Agency Affairs Board, these documents must be obtained by the agent BEFORE accepting a mandate. The Purchaser’s FICA documents are required BEFORE entering into a contract.

1. Verification of residential address and marital status 

Where natural persons are married and one party does not have verification for their address, the person with the verified address can sign an affidavit to the effect that his/her spouse resides with them.

A marriage certificate is sufficient to prove spouses are married.

1. When a person is not physically present 

If you have never met the client you are dealing with, reasonable steps must be taken to establish or verify the identity of the natural or legal person, partnership or trust, taking into account any guidance notes concerning the verification of identities that may apply to the accountable institution.

1. How long are documents to be kept? 

The Compliance Officer must keep the following documents for 5 years:

• Properly completed FICA forms relating to the establishment and verification of all persons as prepared by the compliance officer.
• The mandate.
• The sale or lease agreement.
• The verification documents listed above (or as per the training manual).

1. Reporting of Suspicious Transaction 

A suspicious transaction is one where the transaction raises questions or gives rise to discomfort. If there is reason to be suspicious of a transaction and the circumstances have been assessed, it needs to be reported.

Section 29 of the FIC Act imposes an obligation on any person who carries on a business or oversees or manages a business or who is employed by a business to report suspicious or unusual transactions to the Centre.

Estate Agents must report if they suspect that: 

• The transaction they are involved with has received or is about to receive the proceeds of any unlawful activity.
• A transaction or series of transactions in which they are involved has facilitated or is likely to facilitate the transfer of proceeds of unlawful activities from one person to another or from one location to another.
• A transaction or series of transactions in which they are involved has no apparent business or lawful purpose.
• A transaction or series of transactions in which they are involved is conducted to avoid giving rise to a reporting duty under the FIC Act.
• A transaction or series of transactions in which they are involved may be of interest to the South African Revenue Services in a possible investigation of tax evasion, or
• The transaction involved has been used or is about to be used in any way to hide or disguise the proceeds of unlawful activities.

1. The time period for reporting 

In terms of Regulation 24, a report made under section 29 of FIC Act must be sent to the Centre as soon as possible but not later than fifteen days, excluding Saturdays, Sundays and public holidays, after a natural person or any of his or her employees, or any of the employees or officers of a legal person or other entity has become aware of a fact concerning a transaction on the basis of which knowledge or suspicion concerning the transaction must be reported. In exceptional cases, the Centre may approve of the report being sent after the expiry of this period.

1. Continuing with the transaction in question

Generally, an estate agent may continue with a transaction from which a report emanates. Section 34 of the FIC Act empowers the Centre to intervene in certain transactions after consulting with the accountable institution, reporting institution or person required to make a report.

In such instances, the estate agent may not proceed with the carrying out of the transaction. The Centre’s intervention is valid for a maximum period of 5 days and is aimed at creating an opportunity for the Centre to make the necessary enquiries and to inform and advise an investigating authority.

1. Protection of the Estate Agent’s Identity 

Section 38 of the FIC Act provides for a broad range of measures to protect persons who participate in submitting reports to the Centre. It guarantees that “no action, whether criminal or civil, will be instituted against any reporter who complies in good faith with the reporting obligations of the FIC Act”.

An estate agent cannot be forced to give evidence concerning such a report in criminal proceedings arising from the report. However, the agent may choose to do so voluntarily. If the agent elects not to testify, no evidence regarding their identity is admissible as evidence in criminal proceedings.

1. Reporting Cash Threshold 

Section 28 of the Financial Intelligence Centre Act, Act 38 of 2001 (the FIC Act) makes it obligatory for all estate agents to report cash transactions above the prescribed limit to the Centre in the prescribed format. The prescribed limit will be R25 000.00. Estate Agents are obliged to report all cash transactions of R25 000.00 and above to the Centre in the prescribed format within two business days of the transaction.

1. Internal Administrative Duties 

• Keep records of staff, clients and transactions.
• Formulate and implement internal rules to ensure compliance with the Act.
• Train staff.
• Appoint a compliance officer to monitor compliance with the Act.
• Submit reports.

An estate agency mandate is given to the estate agency firm and not to the individual estate agents working for the firm. As such, the responsibility to establish and verify the firm’s clients lies with the Principal of the firm. To discharge this responsibility the principal may need the assistance of the salesperson or letting agent who obtain the mandates for the firm. Principals should take great care in training their staff to obtain the prescribed information and documentation from clients.

Annexure 50 – FICA Compliance Manual

Annexure 21 – FIC Act with 2017 amendments