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Estate Agents To Join Fight Against Money Laundering   Article Date :18 Jan 2002 The Ministry of Finance is to mobilise estate agents, the Estate Agency Affairs Board, attorneys, banks, and other institutions in its war on money laundering. Mr Bill Rawson, Western Cape chairman of the Institute of Estate Agents, says that the recently passed Financial Intelligence Centre Bill places strict obligations on his industry, and others, to support the authorities in this respect. It establishes a Financial Intelligence Centre (FIC) and a Money Laundering Advisory Council, which will work with local and foreign revenue and intelligence services to curb money laundering and tax evasion. The date on which the new Act comes into operation has not yet been announced. "Under current laws," says Rawson, "there is a general obligation on everyone to report suspicions about money laundering to the police. The new Act tightens the screws and places specific duties on estate agents, attorneys, banks, insurance brokers and fifteen other categories of 'accountable institution' to do so." From the point of view of the estate agency industry, the list of obligations is as follows. Before establishing a business relationship with a client, or concluding a transaction, the agent will have to establish and verify the client's identity (and the identity of anyone representing the client, or whom the client represents), and keep a record of who verified the identity and what means were used. The estate agency will have to keep detailed records of each transaction, including the amounts involved and the names of all parties. The FIC will have the right of access to those records at any time. If a transaction involves payment exceeding a figure to be announced by the Minister of Finance, the estate agency must report it to the FIC. If an estate agent knows or suspects that a transaction to which it is a party involves or may involve money laundering or tax evasion, he must report it, in confidence, to the FIC. He may not tell anyone about his suspicions, or that he has contacted the FIC, and he will be indemnified against criminal and civil action. The FIC will have the power to suspend the transaction for up to five days while it investigates. "The estate agent's obligation to keep his client's affairs confidential is completely overruled by this Act," says Rawson. The Estate Agency Affairs Board, which is the industry's supervisory authority, will also be involved. If it knows or suspects that an estate agency is wittingly or unwittingly involved in a shady transaction, it must report the details to the FIC. Rawson says that the most likely way in which the EAAB would discover such information would be through the annual audit of estate agency trust accounts. Each estate agency will have to formulate and implement internal rules to ensure that it complies with the Act, and will have to appoint a compliance officer to monitor implementation. "These are tough measures," says Rawson, "but obviously necessary ones. They are backed up by some of the stiffest penalties we have yet seen. An estate agency principal who fails to lay down and monitor internal compliance rules can face five years in prison or a R1 million fine. Failure to verify clients' identities, to keep records, or to report suspicions to the FIC will carry a penalty of fifteen years imprisonment or a R10 million fine." Copies of the Financial Intelligence Centre Act are obtainable from the Government Printer. The date on which it comes into operation will be gazetted in due course. Article – Graham Norris CLICK HERE TO RETURN TO THE MAIN NEWS PAGE