Real Estate Investor Magazine South Africa March 2013 | Page 5

FINANCIAL INTELLIGENCE CENTRE ACT ADVERTORIAL Is your business assisting in combating financial crime? C riminals derive profit through illegal activities, such as the sale of banned drugs, counterfeit goods, the trafficking of women and children, and other illegal activities. Criminals use the country’s financial transaction system to launder their illegal profits through various businesses and so make the profits appear legal. Your business could be used in these types of illegal activities To prevent this from happening and to help turn your business into a partner in the fight against crime, you should ensure that your business complies with the requirements of the Financial Intelligence Centre Act No. 38 of 2001 (the FIC Act), as amended. Estate agents have been identified as being susceptible to abuse by criminals wishing to launder the proceeds of their criminal activities, often referred to as ‘dirty money’. An example of this is where a drug dealer buys a property for cash. The funds may have been acquired illegally but, if he later resells the property, then the funds he receives on the sale appear to be legal because he has carried out a legal transaction by selling immovable property through legal channels. Compliance with the provisions of the FIC Act can help to ensure that your business does not play any part in the laundering of money or the financing of terrorism. Obligations of estate agents in terms of the FIC Act Estate agents are categorised as accountable institutions in terms of the FIC Act. This means that your firm accounts to another regulatory body – the Estate Agency Affairs Board (EAAB) – which is responsible for the enforcement of various compliance requirements, including the terms of the FIC Act. The obligations of an accountable institution (in this instance, estate agents) are summarised below: 1 You must register your firm with the FIC. This should be done online via the FIC’s website: www.fic.gov.za A manual process for registering is also available – contact the FIC should you wish to go this route. You will be asked to provide the details of a representative of the business; it is best to list the person who will be responsible for reports you are required to submit to the FIC. (See below for more information about the reports.) 2 You have a duty to identify your clients 3 You have a duty to keep records relating to your clients and to the transactions carried out with them 4 You must provide reports to the FIC in the event of these types of situations occurring: a. Any cash transactions of R25 000 or more b.A suspicious and unusual transaction report must be submitted if you regard a transaction as in some way suspicious or unusual in comparison with normal business practice. This report is also filed via the FIC website c.A terror property report must be submitted via the FIC website if you hold property on behalf of someone who may have been involved in carrying out terrorist activities. These reports assist the FIC in identifying transactions in which there may have been an attempt to launder the proceeds of crime. 5 You must introduce certain measures in your business to promote compliance with the FIC Act within the business. You can access more information on the FIC Act, relevant Regulations and guidance, including Public Compliance Communication 08 and Public Compliance Communication 10 which relate to matters affecting estate agents, at www.fic.gov.za For more information on registering your business with the FIC, contact us via e-mail at [email protected] or phone [phone]