In South Africa, real estate agents (legally defined as property practitioners) are now listed as accountable institutions under the Directive 6 of the Financial Intelligence Centre Amendment Act (FICA). 

In short, this means that estate agents are now legally obligated to comply with certain regulations governing anti-money laundering laws in South Africa. This typically means verifying customer identities via their ID number, screening for PEP, DPIP, FPPO and sanction status, and verifying physical address information.

What is the FIC and an RBA? 

South Africa operates a Risk-Based Approach to anti-money laundering (AML) legislation. In short, this means that each business must take steps to mitigate money laundering that are proportionate to the risks it faces. 

For example, a multinational bank will face far greater risks of money laundering than a small real estate agency. Because the bank faces way higher risks, it will be legally required to implement stricter and more complex systems to mitigate these risks. A small real estate firm, on the other hand, may only be required to implement basic forms of risk mitigation like ID number verification. 

South Africa’s anti-money laundering legislation and its RBA are created and implemented by the Financial Intelligence Centre (FIC). 

“The FIC is South Africa’s financial intelligence unit, mandated to assist in identifying the proceeds of crime, and in combating money laundering, terrorist financing and the financing of proliferation of weapons of mass destruction, thereby helping to make South Africa’s financial system intolerant to abuse.” – Financial Intelligence Centre.

What is the Difference Between an RMCP and an RCR? 

In this context, a Risk Management and Compliance Program (RMCP) is the legal document that identifies what risks a business faces and outlines the steps that it is taking to mitigate these risks. For example, if a business faces a risk of criminal clients using fraudulent identities to launder money, then that business will be required to implement an identity verification system to ensure that its clients are legitimate. All these risks and the steps taken to mitigate them are detailed within a business’s RMCP. 

An RMCP is a complex document and should be created by a law firm or individual who specialises in regulatory compliance. Although free RMCP templates are available online, it is advisable to avoid these because many of them fail upon audit by the FIC. Having your RMCP fail upon audit may lead to fines and legal other penalties. 

Finally, a Risk and Compliance Return (RCR) is an online form created by the FIC. By filling it out, your company demonstrates that it understands money laundering risks and is acting in accordance with its Risk Management and Compliance Program (RMCP). 

How to Submit Your RCR to the FIC 

The RCR can easily be filled out and submitted online via the FIC’s website here. 

Note that real estate agents must fill out the RCR for Directive 6 (not Directive 7). 

The deadline for RCR submission has already passed. The deadline for Directive 6 was the 31st of May 2024, which was already a year-long extension of the original date of the 31st of May 2023. 

Real estate agents are advised to urgently submit their RCR and implement the necessary due diligence laws to avoid serious fines and legal penalties. 

What are the Penalties for Non-Compliance with FICA 

The fines for FICA non-compliance are massive. The FIC is allowed to issue a wide range of fines to both individuals and legal entities, which can be as high as: 

• R10 million for individuals (CEOs and compliance officers)
• R50 million for legal entities (e.g., businesses and trusts)

The FIC and South Africa’s market conduct enforcement body, the Financial Sector Conduct Authority (FSCA), are clamping down on non-compliant businesses and have begun issuing fines. 

In September 2024, a South African law firm issued a R7.7 million fine as punishment for its failure to comply with FICA. Such fines are likely to become more commonplace as the FSCA works to close the non-compliance gap. 

FICA Compliance Solutions for Real Estate Agents in South Africa 

ThisIsMe offers a comprehensive range of products and services that are perfectly designed to help your business meet its FICA compliance obligations. 

The following three services are perfect for real estate agents to ensure FICA compliance:  

• ID Check: Verify a South African ID number and get essential information for FICA compliance. 
• AML Risk Screening: Screen an individual for PEP, DPIP and FPPO status, their presence on international watchlist and sanctions databases, and more. 
• FICA Express: Our leading new service combines an ID check and AML Risk Screening into a one-click service that perfectly meets your FICA compliance needs. 

ThisIsMe offers a comprehensive range of products and services also includes a wide range of general due diligence and risk assessment tools that are loved by our real estate clients. These include: 

• Affordability: Submit a client’s bank statements and get a detailed financial wellness assessment that returns detailed insights of monthly income and expenditure patterns. Estate agents love this service for assessing a client’s viability for financial services like home loans. 
• Credit Reports: Our comprehensive and varied range of credit information services empowers you to easily source all credit information, ranging from simple credit score checks to full-blown credit reports.
• VAT Search: Easily source a business’s VAT number for tax purposes.

To experience our software in action and see how it can address your business’s FICA compliance challenges, simply email sales@thisisme.com or schedule a demo here.