Financial Intelligence Centre Act, which was introduced in 2002, has always stipulated that any suspicious money transactions or client identities have to be reported to them.
Failure to do so is a criminal act and can lead to a jail sentence or a heavy fine. Proof of ‘hot’ money or any other irregularity is not essential. The agent is under obligation to pass on any suspicious details he has to FICA and leave further investigation to them. If he neglects his duty in this respect he is likely to be held responsible for aiding and abetting a criminal act.
An addendum to the FICA (Financial Intelligence Centre Act) makes it essential that certain businesses receiving a cash payment of over R25,000 have to verify the identity of the payer (if necessary checking with the related bank and the South African Police) and have to inform SARS of the transaction.
The revised act states that attorneys, motor dealers and casinos are to be diligent in this respect.
The amendments to the act are aimed at preventing ‘hot’ or dubious money from being laundered via a property or other transaction.
The term cash transactions, includes the receipt of domestic and foreign notes and coins as well as travelers’ cheques, but it excludes cheques, electronic fund transfers and bank transfers for the simple reason that in these transactions the source can usually be easily traced.
South African estate agents are expected to be particularly diligent when it comes to checking on the details surrounding any cash payments of R25,000 or higher.
Estate agents complying with the ruling are expected to do so by electronic report and must establish with FICA their login details. Each branch of an agency is required to get its own login credentials with FICA and to report without going via its head office.
