Tuesday, October 3, 2017

FICA Amendments - BIG fines for non-compliant estate agents

There has been a critically important development for accountable institutions, which specifically includes estate agencies, regarding FICA. A development which if ignored could cost you R10 million in penalties for non-compliance in your personal capacity and up to R50 million as a company!

Are you compliant yet?


On the 26th of April this year, the Financial Intelligence Centre Amendment Act was signed in to law by the president and as a result it was enacted by the Minister of Finance on the 2nd of May.
What you need to know is that the Act imposed new obligations on accountable institutions, including all estate agencies. These obligations have been implemented to combat crimes such as money laundering and the funding of terrorist organisations.
An important obligation which comes into effect today (2nd October 2017) requires that every accountable institution must develop, document, maintain and implement a Risk Management and Compliance Programme (“RMCP”) which will replace the internal rules currently need to be formulated and implemented by accountable institutions.

What is this new Risk Management and Compliance Programme (RMCP)?


The RMCP is a company policy implemented in which the accountable institution sets out how it will go about ensuring that it fulfils its obligation to identify, assess, monitor, mitigate and manage the risk that the services or products offered by that institution may be used to carry out the crime of money laundering or the financing of terrorist activities.
The accountable institution’s RMCP must set out the manner in which the institution will go about meeting the obligations under the Act.

These obligations include:
  • The conducting of due diligence when establishing, maintaining and monitoring new and ongoing client relationships.
  • How the accountable institution will act when they suspect client activity which is suspicious or unusual in line with the Act.
  • How the accountable institution will attend to terminating an existing business relationship where the suspicious or unusual activity is confirmed.
  • How the accountable institution will report any suspicious activity or transactions to the Financial Intelligence Centre.

You could be fined R10 million!


The most important thing to note is what happens if you fail to have a programme in place. Failure to implement a RMCP constitutes non-compliance in terms of FICA and opens the institution up to liability for administrative sanctions.

The administrative sanction may take a variety of forms including, amongst other things, a caution and/or restricting the business activities of the institution and/or a financial penalty of up to R10 million for a natural person or up to R50 million for a legal person per instance of non-compliance.

The penalties for non-compliance clearly cannot be ignored!
 

TPN LeasePack (Residential and Commercial) and SalesPack now contains:

  • A Risk Management and Compliance Programme: you are required by FICA to implement such a Programme. TPN’s programme is available to download immediately. Next you must assign a responsible party from senior management to complete and implement. With final sign-off by the Principal.
  • FICA Forms – no need to retroactively re-FICA your existing clients; simply download the FICA Form for all new clients (landlords or sellers).

TPN LeasePack members can get cracking & download the

"Risk Management and Compliance Programme" here.

 

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