The latest and most comprehensive legislation detailing money laundering controls is the Financial Intelligence Centre Act (Fica), the focus of which is on control requirements.

What is Money Laundering?

Money Laundering is the process by which criminals attempt to conceal the true origin and ownership of the proceeds of their criminal activities. Its purpose is to allow them to maintain control over those proceeds and, ultimately, provide a legitimate cover for the source of their income.

Fica creates money laundering control obligations for banks and other institutions and professionals, such as estate agents, brokers, attorneys and insurance companies.

Customer identification is a crucial element of any effective money laundering control system. We must implement reasonable measures for us to know who our customers are and to prevent criminals from using false or stolen identities to gain access to our services.

Since 1 July 2003 banks were required to obtain certain information and supporting documents from new customers before accounts could be opened. Furthermore, Fica requires that banks re-identify their existing customers (those taken on before 1 July 2003).

One of the major elements of the financial institutions obligation is to know their client. In short clients need to be identified by the use of their green bar coded identity book, and they have to prove were they live. This is usually done by means of a utility bill, which is addressed to you at your physical address.

Due to the additional time and paperwork required for this verification, professionals like attorneys are charging for this service. When purchasing a house you will see on the breakdown of your attorney’s fees a line entry for FICA Verification.