What is FICA?
The Financial Intelligence Centre Act (FICA) was introduced in 2001 to combat money laundering (ML), terrorist financing (TF), financial crime, fraud, and tax evasion in South Africa. It has undergone several significant amendments, most notably in 2017 and 2022.
FICA aligns with international standards set by the Financial Action Task Force (FATF), a global watchdog that provides guidance on improving anti-money laundering strategies. South Africa is one of 39 FATF members and follows the FATF’s 40 Recommendations to shape FICA regulations.
Why is the property industry accountable to FICA?
FICA designates certain sectors as ‘Accountable Institutions’, including:
- Legal practitioners
- Trust and company service providers
- Property professionals
- Banks
- Life insurance providers
- Credit providers
These institutions are required to identify and verify clients, keep records, and report suspicious transactions to the Financial Intelligence Centre (FIC).
In the property sector, criminals have been known to hide large sums of money by purchasing real estate. To counter this, estate agents must ensure transparency, verify all parties involved in a transaction, and confirm that the source of funds is legitimate and not derived from illegal activities.
Documents estate agents require to ensure compliance
Paul Stevens, CEO of Just Property, explains that FICA compliance may seem burdensome to consumers. “While the requests for identification documents, proof of address, and financial records can feel invasive, know that by law, an agent may not accept a seller's mandate or conclude a sale agreement without exposure to severe penalties.”
Typical documents requested include:
- A certified copy of your ID or passport – to confirm identity
- A recent utility bill or lease agreement (not older than three months) – to verify your residential address
- Your SARS tax number – to confirm registration with tax authorities
- Bank account confirmation – to ensure correct fund transfers
- Proof of the source of funds – to verify transaction legitimacy
“Requirements may vary depending on whether you're a buyer or seller, an individual or a business. Self-employed individuals or business owners may be asked for additional documentation,” adds Stevens.
Reassurances about your data
FICA is aligned with the Protection of Personal Information Act (POPIA), ensuring your personal information is handled with strict confidentiality. “Your information is only shared with relevant parties, such as conveyancing attorneys or banks, strictly for the purposes of facilitating the transaction and in compliance with POPIA,” says Stevens.
Evolving risk assessment measures
In 2024, the Financial Intelligence Centre (FIC) updated its risk assessment guidelines, placing a greater burden on property practitioners to identify risk factors in transactions. The new guidelines outline 13 key risk indicators, including:
- Clients unwilling to provide identification
- Payments made by third parties from high-risk jurisdictions
- Tenants who resist granting property access to agents
Stevens notes that high-value transactions in affluent areas like Franschhoek, Stellenbosch, Cape Town’s Atlantic Seaboard, and Constantia are under greater scrutiny. For example, a cash purchase of a luxury villa in Camps Bay by a buyer with no transparent source of funds would be considered highly suspicious.
In line with FICA and the Property Practitioners Regulatory Authority (PPRA), estate agents are legally obligated to report suspicious activities. These could include:
- Clients hesitant to disclose information
- Unusual or inconsistent sources of funding
- Transactions disproportionate to the client’s known financial standing
- Deposits or purchases involving third parties
Supporting a safer property market
“While the document-gathering process may seem like an additional hurdle, it protects both the buyer and the broader integrity of the property market,” says Stevens.
“It creates a trustworthy environment where all parties—from first-time buyers to seasoned investors—can engage in transparent, fair, and secure property transactions. FICA isn’t just about legal compliance; it’s about building trust and safety in South Africa’s property market.”
