FICA: The Financial Intelligence

What is FICA, and why am I expected to comply?

The Financial Intelligence Act 38 of 2001 established a regulatory anti-money laundering system for South Africa. This is in line with international efforts to combat this problem.

Section 21 of the Act is important as it states that an accountable institution may not establish a business relationship or conclude a single transaction with a client unless the accountable institution has taken prescribed steps. Attorneys are regarded as accountable institutions and as such, these steps have to be complied with:

  • establish and verify the identity of clients
  • If the client is acting on behalf of another person, to establish and verify –
  1. the identity of that other person; and
  2. the client’s authority to establish the business relationship or to conclude the single transaction on behalf of that other person; and

-If another person is acting on behalf of the client, to establish and verify –

  1. the identity of that other person; and
  2. that other person’s authority to act on behalf of the client.
  • keep records of business relations and transactions
  • report receipts of cash above a prescribed amount to the Financial Intelligence Centre (FIC)
  • report suspicious transactions to the FIC
  • offer compulsory FICA training to all employees

Thus, all attorneys will require the above information from their clients.