From IEA News - 25 January 2003



BY now, everyone in the property industry should know that the Financial Intelligence Centre Act imposes a number of responsibilities on estate agents to help the government fight money laundering and tax evasion. Implementation of the Act was delayed pending the publication of detailed regulations as to what to do and how and when to do it. Well, the regulations have now been issued, and estate agents, together with banks, insurance brokers, attorneys, and more than a dozen other "accountable" professions and industries, have to begin complying with them nine days from now. 3 February - As from Monday 3 February 2003, it will be compulsory for estate agents to send a report to the Financial Intelligence Centre in Pretoria if they become aware of, or suspect, that a "suspicious or unusual" transaction is under way. That would include a property sale or a lease which is (or appears to be) a money-laundering exercise, or which involves (or appears to involve) the proceeds of unlawful activities. The report can be submitted online through the FIC website (www.fic.gov.za), or by fax or by hand. An 8-page form has been designed for the purpose. A report must be submitted within 15 days (excluding weekends and public holidays) after the estate agent becomes aware or, or begins to suspect, that the transaction is "suspicious or unusual". This presumably supersedes the existing obligation to report shady activities to the SAPS Commercial Branch. We hope that our members will have few, if any, occasions to submit such reports, but we must remind them that the penalties for turning a blind eye or for keeping quiet, and being caught out in a later investigation, entail long prison sentences and/or heavy fines. 30 June - As from Monday 30 June 2003, estate agents will have to begin verifying clients' identities before they do business with them. Clients will include sellers, buyers, landlords and tenants. Details to be verified include name, date of birth, ID number, and address. In the case of companies, CCs and trusts, registration numbers and various other details will also be required. This will apply to everyone in the property industry: agricultural agents, business and commercial brokers, managing agents, residential sales and letting agents. Each firm will have to establish the necessary procedures and record-keeping systems, produce a manual, train its staff, and have a compliance officer to make sure that everyone follows the rules. We recommend that each estate agency principal obtain a copy of the regulations from the Government Printer. Ask for Government Gazette 24176 dated 20 December 2002. Naturally, we will be holding workshops for our members, to help them meet their new legal obligations. Watch the press and our website for details.