The government has co-opted you, and the rest of the estate agency industry, into the fight against money laundering.



ARE you ready to play "Big Brother"? No, not on TV but in real life. By now you should be aware that the government has co-opted you, and the rest of the estate agency industry, into the fight against money laundering. As an estate agent, this places several obligations on you, and the penalties for ignoring them are high: prison, or fines of up to R15 million. What you need to know • To fight a battle, a general needs good intelligence about where the enemy is and what he's doing. So too in the battle against financial crime: the government needs to know about suspicious transactions, and who is involved. Its Financial Intelligence Centre (FIC) will gather and process that information, and will work with the police, the Scorpions, and similar organisations in other countries. You will be one of the FIC's sources of information. You will have to verify the identity of every client you deal with -- and anyone who represents your client or whom your client represents. Precisely how you must do this we will be told in due course. You, or your firm, must keep a detailed record of how you verified the client's identity. You must also keep detailed records of every sale and lease and other transaction. If, at any time, you think that one of your clients, or one of your colleagues (or even your employer) is involved in money laundering -- even unknowingly -- you must inform the FIC, in the utmost secrecy. The FIC can suspend a transaction for up to five days while it investigates. As a matter of routine, you (or your firm) will also have to notify the FIC of any transaction where the payment exceeds a certain amount, even if it's 100% above board. Principals must make sure that everyone complies with these requirements. Each firm will have to write a manual of procedures, train everyone, and employ an in-house compliance officer to make sure that everyone follows the book. The Estate Agency Affairs Board, as the industry regulator, is responsible for watching management to make sure that firms -- and even one-person estate agencies -- comply. Finally, if the FIC asks for access to your records, or for you to co-operate in an investigation, you must comply. Your Code of Conduct obligation to keep your client's affairs confidential falls away in such circumstances. What you need to do • This is all still in the setting-up stage. Although you are now obliged to comply with all the requirements, the FIC itself has not yet been established, so there is as yet no one for you to report to. In the meantime, if you become aware of any money laundering, you should report it to the police. We understand that the government should be able to start issuing guidelines around July, and that the whole system should be fully operational by early next year. We'll keep you posted. Article: Arthur Radburn IEA News 27 April 2002