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What is FICA and why do we need it??

WHAT IS FICA and WHY WE NEED IT?

 

FICA stands for The Financial Intelligence Centre Act, which came into effect on 1 July 2003.

 

FICA was introduced to fight financial crime, such as money laundering, tax evasion, and terrorist financing activities. FICA brings South Africa in line with similar legislation in other countries.

 

FICA is essentially a means to ensure that an institution is required to ”get to know the client”. Financial institutions, like banks or other organizations such as attorneys firms or estate agencies do this by keeping proper records of their clients, requesting particulars and keeping a proper record of where the funds are coming from and where they are going.

 

It is therefore a legal requirement for financial institutions to FICA their clients in order to prevent financial crimes. The Act, places an obligation on the banks/attorneys firms to FICA their clients and it is a criminal offence for them not to do so.

 

The failure to FICA clients can lead to a prision sentence (ranging from 5 to 15 years) and or a fine (ranging from R 1 000 000 to R 10 000 000) depending on the offence, hence the

 

Some offences that are punishable under the Act, include, but not limited to;

 

  • Failure to identify persons involved in a contractual obligation
  • Destroying or tampering with records
  • Failure to advice Centre of a suspicious client/person
  • Failure to report cash transactions
  • Failure to report suspicious or unusual transactionsWe have therefore drafted a list of requirements that should be given or requested to your friendly attorney firm (that would be us) or other institution.For individual:
  1. Copy of client’s ID book;
  2. Utility bill – no older than 3 months and showing clearly the clients’ physical address;
  3. SARS document where clients’ SARS registration number is clearly visible.

 

For Companies and CC’s

 

  1. the registered address of the close corporation or company;
  2. the name under which the close corporation or company conducts business;
  3. the address from which the close corporation or company operates, or if it operates from multiple addresses –
    • the address of the office seeking to establish a business relationship; and
    • the address of its head office;
    • the full names, date of birth and identity number or nationality (as may be applicable), concerning –
    • the manager of the company; and
    • each natural person who purports to be authorised to establish a business relationship or to enter into a transaction with the accountable institution on behalf of the company; and
    • the full names, date of birth, identity or registration number, nationality, address and / or legal form, as may be applicable, concerning the natural or legal person, partnership or trust holding 25%  or more of the voting rights in the company.

 

Documents required for companies

  1. identity document; or if a person cannot produce an identity document, another document bearing a photograph of the person and their names, date of birth and identity number;
  2. a document issued by the South African Revenue Services bearing the person’s name and the relevant number;
  3. a utility bill (no older than 3 months) or copy thereof;
  4. Certificate of Incorporation (form CM1) and Notice of Registered Office and Postal Address (form CM22) – Companies.

Documents required for Closed Corporations

  1. identity document; or if a person cannot produce an identity document, another document bearing a photograph of the person and their names, date of birth and identity number;
  2. a document issued by the South African Revenue Services bearing the person’s name and the relevant number;
  3. a utility bill (no older than 3 months) or copy thereof;
  4. Founding Statement and Certificate of Incorporation (form CK1) and Amended Founding Statement (form CK2) if applicable – Close Corporations.

For Partnerships:

  1. the name of the partnership,
  2. the names, date of birth, identity or registration number, nationality, addresses and / or legal form, as may be applicable, concerning, every partner, including every member of a partnership the person who exercises executive control over the partnership;
  3. each natural person who purports to be authorised to establish a business relationship or to enter into a transaction with the accountable institution on behalf of the partnership.

Documents required for Partnerships

  1. identity document for all partners; or if a person cannot produce an identity document, another document bearing a photograph of the person and their names, date of birth and identity number;
  2. a document issued by the South African Revenue Services bearing the person’s name and the relevant number;
  3. a utility bill (no older than 3 months) or copy thereof;
  4. Partnership agreement.

For all your contract/property needs, contact our offices on 031 003 0630 or charmaine@schwenninc.co.za