Estate agency principals and individual agents must be acquainted with legal commitments in terms of reporting money laundering offences



Estate agency principals and individual agents are straddling a powder keg if they have not yet become fully acquainted with their legal commitments in terms of reporting money laundering offences as contained in the Financial Intelligence Centre Act 38 of 2001 which came into effect on December 3 2001. Estate agents are listed second to attorneys in the act's list of 19 "accountable institutions" intended by government to police money laundering. And the seriousness of that intent is emphasised by draconian penalties carrying a 15 year prison term and fines of R15 million for offenders. These are "entry level" fines that can be applied to "accountable institutions" failing to report serious transactions, failure to identify persons, failure to keep required records, destroying or tampering with records and a host of other seemingly pretty innocuous situations. The point though and this was repeatedly stressed by attorney Johan Muller in his address to estate agents attending the Nedbank/PA Group August 27 Road Show in Durban is that the state only has to prove that the person "ought to have reasonably known of the offence" to gain a conviction. Individual agents could not abrogate their responsibilities by claiming the deal had been approved in writing by their principal. Estate agents, in terms of the act, were also required to compile a record of their dealings with clients and these be retained for a minimum period of five years. Such records could be called upon by the state in support of their investigations into an individual. Another key commitment that immediately affected the industry, and one that was punishable from non-compliance, was the appointment of a "compliance officer" by every company. His, or her role, is the reporting of any unlawful activities to the Financial Intelligence Centre. Although earlier media reports indicating that only cash transactions above R50 000 were legally reportable to the authorities, Muller said no permissable threshold had yet been set by the Minister and this, he warned, could be adjusted from time to time. However, provisions were contained in the act for compulsory reporting of large sums of cash. Muller said the new act provided adequate protection against people reporting possible money laundering offences being sued in a civil claim if the allegations proved groundless. Although the act was already in effect, it was "still a baby in legal terms", but once certain loopholes were plugged up, Muller warned it would be vigorously enforced, from probably around the New Year. Article: 30 August 2002 The Property Professional On-line - Edition 51 RodneyHayter email: hayter@icon.co.za