It is compulsory under The Financial Intelligence Centre Act(FICA) and is aimed at eliminating Money Laundering and financial fraud. FICA compels “accountable institutions”, such as banks and attorneys to physically identify and verify their customers. Accountable institutions are also required by law to report “suspicious and unusual” transactions as well is any cash deposits in excess of R25,000.00 to the Government Financial Intelligence Centre. The Department also monitors the extent to which accountable institutions make reports.
The law therefore compels you to provide: Original ID book or passport; Proof of your residential address (not older than 3 months); marriage certificate and if applicable, your ante-nuptial contract and income tax number.
The banks have chosen to appoint attorneys as their FICA agents, requiring attorney verification when bank documents are signed at attorneys’ offices; with the result a second request for FICA is deliberately intended; in accordance with bank policy.It is important to note that you cannot make your own copies, and cannot make your own arrangements to have a Commissioner of Oaths certify copies of your documents. It can only be done by an employee of the accountable institution that you are dealing with.
As a conveyancer is required to manage multiple relationships, it is quite common for a conveyancer to have to FICA more than one party to a transaction. For instance: The seller; The purchaser; The prospective borrower (purchaser) at the instance of the bank; The existing borrower (seller) also at the instance of the existing bond holder.
The obligation of performing multiple FICA verifications takes up a lot of time, involves analysis, concentrated checking, photocopying; all of which is costly. The banks take FICA very seriously and have set up specialist departments to record and classify the certified documents provided by their attorneys.
FICA has resulted in a reduction in all sorts of fraud; including the deposit of stolen cash or drug money into attorneys’ trust accounts to be surreptitiously hidden in the purchase of property.Numerous schemes involving the theft of someone else’s identity for the purpose of obtaining mortgage loans and purchasing property in that person’s name have been uncovered and/or prevented by FICA.
Andrew Smith has 26 years of conveyancing experience, including subdivisions, township developments, sectional title developments, servitudes, usufruct transfers, general transfers, mortgage bonds, and uses his tax background to structure complicated transactions in the most tax efficient manner.
Question related to FICA:
Can the registration of the property be jeopardised by a proof of residential address that does not have a company letterhead of the rental agent? The rental agent issued monthly rental invoices without the company letterhead and now the purchaser used that as the proof of residence.
Thank you for your response
Gcobisa
In most cases a failure to properly verify residential address should not prevent the transfer from being concluded. However it could in certain circumstances, justify a report to the financial intelligence Centre of a suspicious and unusual transaction.
The simple answer is for the purchaser to use some other form of verification, such as a bank account, tax document, traffic fine and any other independent utility bill, that is issued within the last three months