6 Essential Steps: Navigating FICA Regulations Safely as a Property Practitioner

In the wake of South Africa's greylisting by the Financial Action Task Force in February 2023, compliance with the Financial Intelligence Centre Act (FICA) has become paramount for entities operating in the property industry. Sameer Kumandan, Managing Director of SearchWorks, emphasizes the importance of compliance, noting the sector's vulnerability to money laundering activities.

Despite this urgency, a significant percentage of property industry players remain non-compliant, posing risks not only to their businesses but to the broader economy and international perceptions of the industry.

Real estate entities must undertake the following steps:

1. Appoint a Compliance Officer:

Designate and train a compliance officer responsible for overseeing FICA compliance and accessing the goAML website.

2. Register with the FIC: All accountable institutions must register with the FIC electronically via the goAML system.

3. Develop an RMCP: Create a Risk Management and Compliance Programme (RMCP) outlining the company's compliance measures, including governance, risk assessment, customer due diligence, and reporting procedures.

4. KYC

Conduct Know Your Client (KYC) checks to verify client identities and screen against warning lists. Specialist services like SearchWorks offer comprehensive KYC solutions.

5. Keep Records:

Maintain secure records of all KYC checks and transactions for at least five years, accessible to the FIC if requested.

6. Start Training:

Implement a training program to ensure all employees understand FICA requirements, with records of attendance.

While currently only estate agents are considered accountable institutions, Kumandan suggests that future changes may broaden this scope. Regardless, FICA compliance not only ensures legal adherence but also fosters consumer trust and business success. It's imperative for all property practitioners to prioritize compliance today to safeguard their operations for the future.

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