The Financial Intelligence Centre (FIC) has one main purpose in SA and that is to stop and/or prevent money laundering within SA.
We often see cases on the news showing how people overseas have laundered illegal money through a business or “cooked” their accounting records to hide a surplus in cash received, however, we don’t often hear about these cases occurring in SA. I am not sure of the reasoning as to why we don’t hear of these cases, however, they are around and happening right under our noses.
This is where the FIC comes in, with the right procedures and policies in place, we all should be in a position to point out any unusual or suspicious behaviour and report these findings to the FIC immediately.
Recently my Firm underwent a routine “audit” by FIC, which, although nerve racking to no end, it was a wake up call and a learning opportunity for me. I now fully understand the importance of the FIC and how having the right procedures in place within my Firm can help to combat money laundering within SA.
Since I have been practicing, I have always called for “FICA” documents from clients and when asked “Why?” my response has always been, its law. However, after going through the audit process with FIC, I now know that obtaining these documents, although tedious, is more than just a “legal requirement” it is a step that we do as legal practitioners to help combat money laundering and fraud within SA.
At the beginning of 2023, South Africa was put onto the grey list by FATF (Financial Action Task Force) as our anti-money laundering regimes were not up to scratch. After this announcement, FIC went into overdrive in order to try and correct the regimes that SA has in place. With this urgent “call to action” on behalf of FIC, Attorneys and Estate Agents received a lot of the blame. According to stats listed by FIC, the most common way that people are laundering money and committing fraud in SA is through buying and selling property, therefore FIC started their “audit” routine on Attorneys and Estate Agents.
In the “audit” that we underwent, we had to prove to FIC that we had a “manual” in place, that all employees utilise when dealing with clients. The “manual”, also referred to as the RMCP – Risk Management and Compliance Programme, sets procedures that all employees are to follow in order to correctly obtain information about clients, assess the risk of the client and then report such client to FIC in the correct manner, should the client be of a high risk.
I am happy to advise that Ulrich Attorneys & Associates Inc RMCP was up to standard, barring a few minor changes that we had to make, and that the procedures we follow to correctly FICA a client was up to the FIC standards.