FICA - Still a foreign concept?
Posted by Mariette van Zyl
Although FICA (the Financial Intelligence Centre Act) has been with us for many years, the concept still appears foreign to some.
We all know that your ID and proof of residence must accompany you when going to the bank or applying for finance and we take these documents along quite reluctantly, complaining all the while on why it is necessary. But do we really know the purpose of having to provide these documents?
The purpose of FICA is first and foremost to combat Money laundering and by doing so prevent terrorism, fraud and identity theft.
The Act provides for the establishment of "Accountable Institutions" (AI) which are institutions that must comply with the provisions of FICA. Each AI must appoint a Compliance Officer who must oversee the compliance of the AI to the provisions of the act and who has the responsibility of submitting a report to the Financial Intelligence Centre (FIC) as described in the Act. A report must be submitted when:
- Cash is received or paid about above the cash threshold as published from time to time. The threshold currently stands at R24,999 and any amount received or paid in cash above this amount must be reported, regardless of its origin. This includes cash payments made into the AI's bank account.
- Terrorist Property Report : when transactions are conducted with individuals who are recorded on a United Nations sanctions list or other suspected terrorists.
- Suspicious transactions reports must be made when a person knows or ought reasonably to have known or suspected that a transaction to which they are a party may involve the proceeds of unlawful activities. Failure to do so may result in a fine of R100 million or 15 years imprisonment.
It is important to note that not only banks are listed as Accountable Institutions, but also Attorneys and Estate Agents. Therefore when your attorney and/or Estate Agent ask for your FICA documents they are complying with legislation that forces them to verify your identity.
An AI must collect the following information:
a) full names
b) identity number and/or date of birth
c) income tax registration number
d) residential address
Verifying a person's identity requires face-to-face verification. This involves the verifier physically seeing the person together with his original identification documents and verifying that the information supplied by the person corresponds with the original documents and that the original documents comply with the relevant security checks to rule out the possibility of fraud and identity theft.
Identity theft is a real threat in our modern day society and legislation such as FICA has the aim to combat this threat and protect the members of society from becoming victims hereof. As any other legislation however, the aim of FICA can only be achieved if the regulations thereof is followed and enforced by those responsible to do so. And if it is embraced by those it is meant to protect.
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