F.I.C.A

STAFF COMPLIANCE MANUAL

This manual serves as the official F.I.CA Procedures Manual

in terms of Act 38 of 2001

(Financial Intelligence Centre Act) (F.I.C.A)

Century 21

This manual is issued to:

________________________________________________

I/D Number:

___________________________________________

1. INTRODUCTION

In terms of F.l.C.A., an estate agency is an Accountable Institution and

must comply with the following as we herewith do:

Appoint a COMPLIANCE OFFICER:

The person appointed to this position in our firm is:

_____________________________________________________________________

The Compliance Officer will be responsible for reporting suspicious

transactions to FIC, and NOT the Verification Officer

(employees/agents)

Each agent or employee dealing with clients is a VERIFICATION

OFFICER. Verification Officers duties' are limited to the collection and

verification of certain key information of the clients. (K.Y.C. =''Know

Your Client") Please refer to sections a) to d) of this manual for detail.

Implement a compliance regime for staff to follow:

This manual serves as such a compliance regime and must be adhered

to at all times.

Train staff in the observance of the compliance regime:

You have received such training and will receive up-dates as and

when necessary.

Report suspicious transactions where money laundering or a crime is

suspected.

Keep F.l.C.A. records in a safe place for a period of 5 years.

Render all possible assistance to F.I.C. personnel.

[Pg 1]

2. VERIFICATION OFFICERS: INFORMATION GATHERING

Client questionnaires have been prepared, with separate forms being

available for:

A. Natural persons (Sellers or Lessors)

B. Natural persons (Purchasers or Lessees/ Tenants)

C. Legal persons (Companies, Close - Corporations, Trusts)

(Sellers or Lessors)

D. Legal persons (Companies, Close Corporations, Trusts)

(Purchasers or Lessees)

NOTE:

When a legal person enters into an Agreement, the relevant form for

the legal person, as well as one form for each company officer,

shareholder (if shareholding exceeds 25 %), trustee and beneficiary or

member of the CC must be completed. (See below)

Both sellers/lessors AND buyers/lessees of property are deemed to be

CLIENTS in terms of the Act. Any person assisting a party to the

Agreement or providing funds to purchase/let the property must also

be treated as a client as well as spouses when married in community of

property.

Questionnaires must be available from the office stock. A copy of

each type of questionnaire is appended hereto for easy reference.

Please select the correct form for use in each particular case. Please

make sure that the form is completed in its entirety by all relevant

persons. Refusal by the client to supply information or if false or

incorrect information is supplied constitutes in itself a suspicious

transaction or person, and must be reported to the FIC. Please note,

however, that you may not threaten the client with reporting them to

the FIC if he/she refuses to supply the information. Please refer to

[Pg 2]

section 3 hereof if a client refuses to supply information or sign the

document after a thorough explanation has been given to him/her.

F.I.C.A. prescribes that we are to obtain the best available and valid

evidence to corroborate the information we collect. Herewith is a

guide as to what is expected. If you are in doubt, or if the best

evidence is not available and the next best must suffice, speak to the

Compliance Officer about how you may satisfy the F.I.C.A.

requirement in this regard.

a. Proof of Identity

Natural persons- South African citizens

A copy of their green ID book. If not available, record the person’s

detail in the space provided on the form and obtain a copy of that

person's passport, or "credit card”, drivers licence or official

temporary Identification document.

Natural persons- Foreign nationals

A copy of that person's passport

SOUTH AFRICAN COMPANY

A copy of the company Certificate of Incorporation (form CM1)

bearing the stamp of the Registrar of Companies.

CLOSE CORPORATIONS

A copy of the relevant CK2 form bearing the stamp of the Registrar

of Close Corporations.

[Pg 3]

TRUSTS

A copy of the Trust Deed with the endorsement of the Master Of The

High Court appearing thereon, and a copy of the Certificate Of

Appointment of the Trustees issued by The Master .

In addition, where Companies, Close Corporations or Trusts are

concerned, them am further requirements:

Companies

The identity of the chief executive officer must be established and

proved (as is the case with natural persons). Furthermore the identity

of every person who holds 25% or more of the shareholding in the

company must be established and proved.

Close Corporations

The identity of every member must be established and proved.

There may not be more than 10 members, and all members must be

natural persons.

Trusts

The identity of every trustee must be established and proved. The

identity of every identifiable beneficiary must also be established

and proved.

Furthermore, where a person acts as representative for another natural

person or a legal person (a Company, Close Corporation or Trust):

1. The identity of the person so acting must be established and proved.

2. That person's authority to act must be established by:

Securing a copy of the power of attorney where the person is acting as

a representative of a natural person;

[Pg 4]

Securing a copy of the resolution of directors, member or trustees

appointing that person to act as representative of a company, close

corporation or trust respectively.

b. Proof of residential address

Natural Persons

Copy of a rates bill or electricity and water account, or

correspondence addressed by any state, para-statal or local

authority addressed to that person at such address. The document

must be current (i.e. not more than 3 months old.)

Legal persons

o Close Corporations and Trusts

As per point “natural persons” see above

o Companies

The formal notice of registered office (form CM 22) or a

letter from the Company Auditor confirming the

registered address.

c. Proof of clients main bank account

A copy of a bank statement issued to the client, or a copy of a blank

or cancelled cheque.

d. Proof of S.A.R.S registration

A letter from S.A.R.S to client containing his name, address, and

Income Tax reference number. No detail of tax affairs is required.

e. Proof of employment

This is not prescribed by the Act, but will help to establish credibility of

the client if other substantiating documents are not readily available.

[Pg 5]

3. VERIFICATION OFFICERS: VERIFICATION PROCEDURE

At the time of taking an offer from a purchaser (after he/she has signed

the offer to purchase) and when the seller accepts such offer (after

he/she has signed the offer to purchase) you are to gather the

necessary KYC information. Do not make an issue out of it, rather treat

it as just another form in the transaction process to be completed. Fill in

the questionnaire with the information that is obtained from the client,

and obtain the required copies of substantiating documents.

Note that in the case of purchasers, the portion of the form dealing

with the source of funds other than bank loans must be completed.

Furthermore, if the client is a South African citizen and does not have a

book of life or other official identification, record an explanation as to

why such identification for the client is not available.

Once the form is completed, get the client to sign the form in the

space provided, and then sign it yourself as the Verification Officer who

obtained and verified the information.

If the client objects to supplying the required information or

substantiating documents, or sign the questionnaire, do the following:

Do not alienate the client and lose the transaction by inappropriate

comments or hostility. Show the client the company letter

“IMPORTAT NOTICE TO CLIENTS” in the back of this manual, and

request cooperation in a diplomatic way.

If the client still refuses to comply or if the required substantiating

documents are not available, make a note on the questionnaire of

his refusal ("client refuses info") or of any substantiating documents

that are still outstanding ("to be obtained")

If the client refuses to sign the questionnaire, endorse it with "Client

refuses to sign", and sign it in the space provided for the Verification

Officer- keep your cool!! Do not threaten the client with reporting to

FIC.

[Pg 6]

Conclude the transaction and get copies of whatever

substantiating documents are readily available.

Discuss the difficulties experienced with the Compliance Officer.

Hand the completed form and the various supporting documents to

the Compliance Officer who will check the forms, and if they are in

order he will counter-sign the questionnaire and issue you with a copy

thereof as e receipt.

If the form is not in order, he will give you a written instruction as to what

is outstanding. You must then obtain such outstanding particular or

documentation without delay and resubmit everything to the

Compliance Officer, who will counter­ sign it and issue you with a copy

as a receipt.

It is vital that you keep your receipt for a period of 5 years. F.I.C.A

provides that you, as the responsible staff member, may be held

accountable (and / or jailed or fined) should you fail to comply with

the firm's internal F.I.C.A. compliance regime. The receipt from the

Compliance Officer is your proof that you did comply.

The Compliance Officer will then file the questionnaire in the F.I.C.A

records filing system. A copy of the Seller's and Purchaser's

questionnaires will be attached to the Agreement of Sale and

forwarded to the Transferring Attorney and the Bank / Bond Originator.

The client may, however, be required to complete another FICA

questionnaire with these instances in terms of the Act.

[Pg 7]

4. COMPLIANCE OFFICERS: REPORTING TO F.I.C.A OBLIGATION

F.l.C.A has been passed primarily to counter money laundering (which

is the process whereby money obtained by illicit means is rendered

legitimate) and the avoidance of tax or fiscal obligations.

As an Accountable Institution we are obligated to report to the FIC any

transaction which is unusual or suspicious, or which appears to be an

attempt to evade responsibility for payment of any tax or other fiscal

obligation. We may not pass our obligations on to other Accountable

Institutions like Attorneys or Financial Institutions; even though we know

that they will also have to perform the required KYC procedures.

Whilst it is difficult to give hard and fast rules as to what to look out for in

this regard, herewith a few pointers:

You will be deemed to have sufficient experience or knowledge

of the world at large to have an insight into whether a

transaction is suspicious or not. In other words, the test as to

whether you should have known or been suspicious is objective

(logical), not subjective. That is, the test is not whether you knew

or suspected, but should you have known or suspected.

A transaction is not suspicious if there is a reasonable belief that

the person involved therewith could reasonably be expected to

have access to funds he is to use to conclude the transaction . In

other words, if the client gives a reasonable explanation in

regard to the source of funds to be utilised, then the transaction

is not suspicious.

Insofar as an unusual transaction is concerned, it is difficult to

give any guidelines at all as, by its nature, the transaction is not

common place. If the circumstances are such as to make you

[Pg 8]

think that the client is up to something odd that would be

sufficient to trigger a suspicion that the transaction is unusual.

The position in regard to clients attempting to avoid a tax or

fiscal obligation might normally be more obvious. The obvious

understating of the purchase price, with the remaining portion of

the true purchase price not being recorded in the sale

agreement, is an obvious attempt to decrease the transfer duty

or VAT payable or launder money. This would be reportable.

Large amounts paid in cash (bank notes) (currently R 25 000)

could also give rise to a suspicion that this money has not been

declared for income tax purposes, should the client not give a

plausible explanation for the source of this cash amount. Once

again the suspicion is reportable.

Payment of amounts due in terms of the Agreement in the form

of anything but legal tender (money, cheque, guarantees') like

gold dust, diamonds, jewellery, drugs, money sprayed with anti-

theft dye, or other extraordinary means is clearly reportable.

Any person bringing in foreign capital when buying property or

taking money out of the country when selling property must be

reported, even if it is an above board transaction.

With regards to the letting of properties, the following:

If a client rents property, pays the rent in cash and sub-lets the

property for an amount that is LESS THAN THE AMOUNT that he

rent is for, he is clearly laundering money. The same applies if he

buys property and rents it out at far below the current market

related rentals. Insisting on receiving rental amounts in cash

could also be deemed suspicious, and is reportable.

[Pg 9]

5. VERIFICATION OFFICERS: REPORTING SUSPICIOUS TRANSACTIONS TO THE

COMPLIANCE OFFICER

Make a written statement of what the facts are and what you

suspect the client's intentions are or why the transaction is in your

opinion suspicious. Hand the statement to the Compliance

Officer together with the questionnaire.

He will counter-sign your report and questionnaire, and give you

a copy of each as a receipt which you must keep for a period of

5 years.

The Compliance Officer will do any further investigation (if

necessary in his opinion) and then decide whether to report the

transaction or not.

PLEASE NOTE: It is not for you (the Verification Officer) to report to

F.I.C.A, this will be done by the Compliance Officer.

Note further that a report must be submitted to FIC within 15

days of you having the knowledge or suspicion that the

transaction is unusual, suspicious or reportable, or that the

transaction’s likely result is to evade a tax or fiscal obligation.

Accordingly you must report your suspicions and hand in your

written report to the Compliance Officer as soon as is practical

after you acquire the knowledge, (or suspect) that the

transaction is reportable.

Finally, the transaction is to proceed even after a report is made,

unless the FIC directs otherwise. It follows therefore, that you may

not inform the client that a report on the transaction has been

made to the FIC. In fact, it is an offence to inform any person

other than your Compliance Officer, your Principal or your

attorney that a report has been made. Please rest assured that

the Act protects the Identities of Verification Officers and

Compliance Officers and any reporting done may not be used

by the Authorities in Court or otherwise when investigating or

prosecuting anyone.

[Pg 10]

6. COMPLIANCE OFFICERS: REPORTING PROCEDURES TO F.I.C.A

To the best of your ability, ascertain the true facts of the situation, but

without raising the clients' suspicions or without expressing your

suspicions to the Verification Officer. Be very non-committal. The less

the Verification Officer knows about the actual reporting, the better. If

you have to contact the client for more information, think out a cover

story; write it down, AND STICK TO IT.

If you are convinced that the transaction may be suspicious in nature,

contact the FIC at the contact numbers listed below by phone, fax or

e-mail and let them guide you further. Keep a summarised written

record of any conversations you may have from this point onward with

the client, the Verification Officer, or the FIC representative with

regards to this transaction.

7. EMPLOYEES’ COMPLIANCE WITH THE ACT

The implementation of the Act and compliance thereto by all agents

and employees or not is not an option. By affixing your signature hereto

confirming receipt of this manual, you also undertake to comply with

the Act and to thereby safeguard the interests of our clients, the

Company, and yourself.

This manual and implementation thereof, automatically forms part of your

Employment Contract and the Minimum Standards of the Company.

[pg 11]

This MANUAL includes:

SUMMARY OF DUTIES OF: PRINCIPALS / MANAGERS

COMPLIANCE OFFICERS

VERIFICATION OFFICERS

FIC Contact Details

EXAMPLE OF COMPANY LETTER TO CLIENT EXPLAINING F.I.C.A.

EXAMPLES OF THE APPLICABLE QUESTIONNAIRES (from the EAAB

Website: http://www.eaab.org.za/act/financial_intelligence_centre)

1. Establish and verify the identities of natural persons who are

South African citizens or residents of South Africa

2. Establish and verify the identities of natural persons who are

citizens or residents of a country other than South Africa

3. Establish and verify the identity of a close corporation

4. Establish and verify the identity of a South African company

5. Establish and verify the identity of a partnership

______________________________ ______________________________

Date Principal / Manager

______________________________ ______________________________

Date Agent / Employee

[Pg 12]

SUMMARY

F.I.C.A: ESTATE AGENCY PRINCIPALS’ DUTIES AT A GLANCE

Appoint and train Compliance Officer, if it is someone other than the

Principal.

Compile and issue a F.I.C.A. Manual to employees.

Train employees (Verification officers and Compliance Officer).

Create infrastructure to comply with the record keeping obligations of

the Act.

Supervise continuously that the Act is complied with.

F.I.C.A: COMPLIANCE OFFICERS' DUTIES AT A GLANCE

Train employees

Ensure that F.I.C.A questionnaires are completed

Receive completed F.I.C.A questionnaires and substantiating

documents

Give receipts to Verification Officers

"Keep FIC records safe from theft, alteration, and destruction for a

period of 5

Years

If Verification Officer reports suspicious circumstances, get full detail.

If you think that there is something suspicious afoot, report to FIC

Ensure that you get acknowledgement of report received by FIC

Assist FIC staff in all enquiries.

[Pg 13]

F.IC.A: VERIFICATION OFFICERS' DUTIES AT A GLANCE

When a seller accepts an offer to purchase, i.e. when the transaction is

concluded, a FICA questionnaire must immediately be completed by the

selling agent (Verification Officer) for:

Seller/s

Purchaser/s

Suretyship/s

1. Complete applicable F.I.C.A. questionnaire (KYC)

2. Obtain verification (copies) of:

Identity document

Current residential address

S.A.R.S. income tax number and office

Main bank account detail

Source of cash (if any)

Employment (payslip)

3. Have client sign questionnaire

4. You sign questionnaire

5. Hand questionnaire and substantiating documents over to

Compliance Officer. (Discuss any suspicious circumstances with

Compliance Officer and note it on the questionnaire or an addendum

thereto)

6. Get signed copy from Compliance Officer as a receipt

7. Keep your receipt (questionnaire) for 5 years

SPECIAL NOTES TO COMPLIANCE OFFICERS AND VERIFICATION OFFICERS

If the seller does not accept the offer to purchase, endorse same with

"Rejected, price too low" (as an example), and hand in to office for filing with

purchasers’ questionnaire.

If the mortgage bond is not approved, the agreement of sale and all FICA

documents for purchaser and seller must also be kept for 5 years. Hand it in to

your office and / or to your Compliance Officer.

Although the transferring attorney and the financial institution are obliged to

KYC the clients as well, you may not use this as an excuse not to comply with

FICA. Attorneys may not do the KYC on your behalf either, you must do it

yourself.

[Pg 14]

FIC CONTACT DETAIL:

Financial Intelligence Centre

Private Bag X177

Centurion

0046

Tel Number: 0860 342 342 (FIC FIC)

Compliance and Prevention

Tel Number: 0860 222 200

Fax Number: 0860 333 336

Head Office

Tel Number: +27 12 641 6000

Fax Number: +27 12 641 6215

To report any fraudulent, corrupt or suspicious activities involving the

Financial Intelligence Centre please call the anti-fraud and corruption

hotline:

0800 20 1104

NOTICE

Monitoring or recording of telephone calls and electronic communication

The Financial Intelligence Centre (FIC) advises that any telephone calls, e-

mails or other communication between yourself and the FIC may be

recorded or monitored. The objective of this is to retain evidence of a

particular interaction between ourselves, as well as for quality control and the

training of staff by the FIC. Using the FIC’s communication channels means

you acknowledge and agree to this recording and monitoring.

Website: http://www .fic.gov.za

[Pg 15]

IMPORTANT NOTICE TO CLIENTS

ACT 38 OF 2001 (F.I.C.A.)

In terms of this act, no estate agent may conclude an agreement with a

client, unless the act is complied with.

The act prescribes, inter alia, that:

The estate agent obtain from clients certain information and

supporting documents;

Any estate agent, as well as their clients, may be fined or sent to prison

if found guilty of non-compliance with the Act;

The obtaining of the information from the client and the subsequent

processing of that information is not optional and may not be passed

on to the transferring attorney or to anybody else.

We ask for your co-operation in this regard in order to safeguard our mutual

interests. We are registered with the authorities and are bound by various

Acts to protect your personal and confidential affairs and will not divulge it to

any unauthorized person or instance.

Our consultant is trained and will guide you through this process in a

professional manner.

Thank you for your co-operation.

Yours faithfully

______________________________

Principal / Manager