The property sector is considered at high risk for money launderers, who attempt to integrate their illicit funds into the financial system through the rental and purchase of property, such as houses, apartments, office space, factories, and hotels.
Property practitioners are warned not to knowingly or unknowingly be lured into money laundering or other financial crimes as they risk reputational damage, regulatory sanctions or prosecution.
FIC Act compliance
Property practitioners, listed in the Financial Intelligence Centre Act (FIC Act) as accountable institutions, must meet FIC Act compliance obligations. These obligations include identifying and reporting to the Financial Intelligence Centre (FIC) all transactions that appear unusual or suspicious.
File suspicious or unusual transaction and activity reports
Section 29 of the FIC Act stipulates that any person who carries on, oversees, manages or is employed by a business should report suspicious transactions and unusual activities to the FIC.
Property practitioners must file suspicious and unusual transaction reports (STRs) when the business knows or suspects it has received or is about to receive the proceeds of any crime or terrorist-related activity.
When filing the STR, you do not have to prove that the funds involved are linked to a crime, and there is no monetary limit or threshold applicable when filing.
Even if a transaction has not been concluded, but the client’s behaviour makes you suspect possible money laundering and/or terrorist financing, you must submit a suspicious or unusual activity report (SAR).
Register and file online
All STRs/SARs must be submitted as soon as possible, but no later than 15 days after becoming aware of a suspicious activity or transaction. The report must be filed on the FIC’s registration and reporting system on the FIC website. First register online with the FIC before submitting your report. To register, visit the FIC website and click the “Click here to register or report” banner.
Filing a section 29 report does not prevent the property practitioner from continuing with the transaction. By submitting the STR, the business is simply alerting the FIC that it suspects its business is being abused for purposes of money laundering.
The FIC Act protects the identities of those filing a report with the FIC, and they cannot be forced to give evidence in criminal proceedings concerning such a report.
The call to register as an accountable institution
Property practitioners are reminded of their obligation to register as accountable institutions with the FIC. See Public Compliance Communication 56 (PCC 56) on the interpretation of property practitioners.
All property practitioners must complete and submit risk and compliance returns in terms of Directive 6 without further delay. This return can be accessed by visiting the Information Resources section on the FIC website. When the dropdown menu appears, click General Notices, scroll down and click “Directive 6 and Directive 7 on submission of risk and compliance returns to the Financial Intelligence Centre by Accountable institutions.”
The risk and compliance return covers the reporting period from 1 April 2022 to 31 March 2023. The online portal remains open for you to submit your risk and compliance returns urgently if you have not yet done so.
Need more info or assistance?
For more compliance information and guidance, visit the FIC website or contact the compliance contact centre on the number listed below or log an online compliance query by clicking the “Contact the FIC” banner and then “Log a Compliance Query” and complete your details before submitting.