New FICA changes: This is what you need to know

This has not been widely publicised, but the Property Practitioners Regulatory Authority (PPRA) recently decided that all property practitioners have to undertake additional risk management and compliance training with regard to the Financial Intelligence Centre Act (FICA) - and obtain certification that they have done so, before the end of this month. 

This followed a survey in March by the Financial Intelligence Centre (FIC) - which is responsible for implementing FICA and helping SA comply with international anti-money laundering agreements - which showed that the real estate sector was particularly vulnerable to money laundering activities and the potential financing of terrorist activities.

So what does this mean for us, and for you as our client? The effect for us was that we immediately had to:

• Re-assess and revise our Risk Management and Compliance Policy (RMCP), and our existing FICA questionnaires;

• Get all our franchisees to accept the new RMCP in writing, adopt it as the policy for their specific franchise and appoint their own risk management officer if they did not already have one;

• Ensure that every Chas Everitt employee (not only agents) received and signed for a copy of the new RMCP; 

• Provide training for all our agents on the amended FICA requirements, the revised RMCP and the FICA questionnaires they need to go through and fill in with clients; and

• Ensure that the certificates proving that they had completed the training were printed, given to their risk compliance officers and put on file.

But more importantly, we want to be sure that our clients understand what the changes to the application of FICA mean to them - and that we are not just being nosey when we ask you for all sorts of very detailed personal and financial information.

The first thing you need to know is that there is a cash threshold of R25 000 (paper money, coins or travellers' cheques) for every real estate transaction. If you want to use any amount of cash greater than this to pay for a property purchase or rental, we have to report it to the FIC.  

Secondly, we are legally obliged to perform a thorough due diligence with every client or prospective client and this will require you to supply the answers to a fairly lengthy and detailed questionnaire about yourself, your reasons for wanting to do business with us, your reasons for selling, buying or renting, your work visas or permanent residence permits if you are a foreign national, and the source of the funds being used to finance the transaction. If you refuse to provide any of this information, we may also have to report you to FICA. 

Third, we will need certain documentation from you, including a valid form of official picture identification such as an ID card, passport or driver's licence, which must have a unique number and a photo. 

Fourth, our risk compliance officers are required to check the names of every client, prospective client and legacy client against the anti-terrorism List 1267 every six months, and obviously immediately report any that match to FICA.

Fifth, we need to be especially careful and exercise additional controls when doing business with prominent influential people such as heads of state, members of royal families, ambassadors, executives of public enterprises and high-ranking military officers, because they are considered by the FIC to be "high risk" clients. 

And finally, we have to keep all FICA information and documents for five years and make them available to the FIC on request while also securing them properly and protecting them from unauthorised access.

This is a lot, I know, but within the next couple of weeks, in true Chas Everitt style, we will be rolling out a new technology that makes it all much easier to deal with. Watch this space...