How to easily pass your FICA audit!

With the latest updates to FICA, the Financial Intelligence Centre and the Estate Agents Affairs Board has begun to carry out FICA audits on estate agents around the country.

Follow these 5 simple steps to pass your FICA audit with flying colours …

Step 1: Have a Risk Management and Compliance Programme in place

One of the most crucial aspects of FICA compliance is the implementation of a Risk Management and Compliance Programme (RMCP). This is an official company document that contains the agency’s company policies that will allow them to identify, assess, monitor, mitigate and manage the risk that their agency will be used by unscrupulous individuals to carry out crimes such as money laundering.

The RMCP is a document that must be signed into force by the principal of the agency and must be made available to all employees.

A template RMCP is available to download in the LeasePack at the TPN Shop.

Step 2: Know Your Client

FICA requires that an accountable institution must not continue a business relationship unless the accountable institution has verified the identity of their client. In the case of an estate agent, that is the buyer, seller, landlord or tenant.

In the past, getting to know your client was as simple as a copy of ID and proof of address and that was your obligation completed – that is no longer the case!

With the introduction of the amended FICA Act, a greater obligation and level of risk has been placed on the agency to make sure that in addition to the collection of these documents, they identify the source of the funds for higher risk individuals.

TPN has recently launched the ‘Know Your Client’ enquiry that takes the stress out of the process by accessing verified information, online and in real time through the National Population Register. If your client passes the TPN KYC enquiry, FIC will be satisfied that you have fully met this obligation.

Step 3: Correct document storage

Once you have collected the information on your clients, the question that the FIC auditor will be asking you is: ‘how are you storing the information?’

You must store it in a manner so that it cannot be accessed by the general public. In practice, this means that the documents must be kept in an area of the office that is not entered by the clients and kept in locked cabinets.

The Act and your RMCP may also make provision for the documents to be kept digitally or in off-site storage, however the agency still bears the risk in the event that any documents are lost. This means that agencies should be very careful to have this information backed up in at least one way and preferably multiple manners.

Step 4: Report suspicious activity

FICA speaks at great lengths about an accountable institution’s obligations to identify risk, but once you have identified that risk, what is your next step? Report the suspicious activity to the Financial Intelligence Centre.

In addition to reporting suspicious information, you are obligated to report any cash amounts received that are greater than R24 999.

The FIC has made the process of reporting extremely easy as it can all be done online at http://www.fic.gov.za

When the Financial Intelligence Centre comes in to audit you, they will ask you for proof of the reports that have been filed to the FIC. In the event that you do not accept any cash payments and you have not witnessed any suspicious transactions, you may inform the auditor that no reports have been filed.

Step 5: Train your employees

The accountable institution (or estate agency) is responsible for providing on-going FICA training to all members of staff on an annual basis or in the event of any changes in FICA-related legislation, whichever of these come first.

The appointed responsible person must ensure that the training of all employees is carried out. Also, should an employee at any time have questions relating to FICA, FICA amended or any policies of the accountable institution, the responsible person must be available to hear these questions and supply suitable answers as soon as is possible.

The TPN FICA Training Manual, available as part of the in the LeasePack, is an invaluable tool to simplify the requirement of internal and on-going training.

Passing your FICA audit should not be something that causes you major stress! By following these 5 steps and with a little help from friends at TPN, you will easily meet every necessary requirement.

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