Meumann White News

1. The Financial Intelligence Centre Amendment Act, 2008 ("the Amendment Act") will have significant implications for the Estate Agents profession. 1.1 The functions of the Financial Intelligence Centre ("the Centre") are amended to include:- 1.1.1 The supervision and enforcement of compliance with FICA or any directive made in terms of FICA and the facilitation of effective supervision and enforcement by supervisory bodies. 1.1.2 The supervision and enforcement of compliance with FICA or any directive made in terms of FICA by accountable institutions, reporting institutions and other persons to whom the provisions of FICA apply that,:- 1.1.2.1 are not regulated or supervised by supervisory body in terms of FICA or any other law:- 1.1.2.2 are regulated or supervised by a supervisory body in terms of FICA or any other law, if that supervisory body fails to enforce compliance despite any recommendations of the centre in terms of Section 44 (b). 1.1.3 The implementation of a registration system in respect of all accountable institutions and reporting institutions. 1.2. The Centre will now have the power to issue a written directive to any category of accountable institution "or other person to whom the provisions of (FICA) apply" regarding the application of FICA and may issue a written directive to any accountable institution "or other person to whom the provisions of (FICA) apply" to for example, "provide the Centre …. within the period specified in the notice, with any document in its possession or custody or under its control … (or to) cease or refrain from engaging in an act, omission or conduct in contravention of (FICA)." The costs incurred in complying with such a directive are borne by the accountable institution. These directives may only be issued to Estate Agents if the EAAB has failed to do so, but the EAAB may only issue directives after its consulted with the Centre. In addition the Centre will have the power to issue directives to "a person who carries on the business or is in charge of or manages as business" as those persons, to whom the provisions of FICA apply. 1.3. The EAAB will become responsible for supervising and enforcing compliance with FICA or any order, determination, or directive made in terms of FICA by all estate agents. This obligation is expressly stated to form part of the legislative mandate of the EAAB as supervisory body and constitutes a core function of the EAAB. 1.4 The supervisory body can delegate its powers. 1.5 The EAAB must submit to the Centre within the prescribed manner a written report on any action taken against any estate agent in terms of FICA or any order, determination or directive made in terms of FICA. 1.6 The Amendment Act will force the EAAB to co-ordinate its approach to exercising the powers and functions in terms of FICA and to enter into a written memorandum of understanding with the Centre in respect of the those powers. 1.7 The director of the Centre or the head of a supervisory body may appoint any person in the service of the Centre or supervisory body, or any other suitable person as an inspector to undertake inspections in terms of FICA. It would appear that the director of the Centre has the power to appoint EAAB employees as inspectors at his discretion and to determine the remuneration paid to that person and to determine the extent of a persons powers to inspect. 1.8 For purposes of determining compliance with FICA or any order, determination or directive made in terms of FICA, an inspector will have the power to enter and inspect any premises at which the Centre or supervisory body reasonably believes that the business of an accountable institution, reporting institution or other person to whom FICA applies is conducted. Such inspection will take place at any reasonable time and on reasonable notice where appropriate. No warrant is required for the purpose of inspection. The powers of inspector include the power to order any person who has or had any document in his possession or under his control relating to the affairs of the accountable institution, reporting institution or person to produce the document or to furnish the inspector with information in respect of the document and to examine or make extracts from or copy any document in the possession of the accountable institution. The inspector also has the power to seize any document which in the opinion of the inspector may constitute evidence with non compliance with FICA or any order, determination or directive made in terms of FICA. 1.9 The EAAB will only have the power to conduct an inspection "other than a planned routine inspection –" after consultation with the Centre on that inspection. 1.10 The inspector appointed by the director of the Centre may conduct an inspection only if the supervisory body failed to conduct the inspection despite a recommendation of the Centre, or failed to conduct an inspection within the period recommended by the Centre. 1.11 The Centre or the EAAB may impose administrative sanctions on Estate Agents when satisfied on available facts and information that the institution or person has for example failed to comply with the provisions of FICA or any order, determination or directive made in terms of FICA. The Centre's powers to impose administrative sanctions extend to any "person to whom (FICA) applies," that "(any) person who carries on business or is in charge of or manages a business." The administrative penalties include financial penalties, directives to take remedial action or to make "specific arrangements" in the restriction or suspension of certain specified business activities. The Centre can impose these administrative sanctions on Estate Agents directly. No obligation to consult the EAAB exists. 1.12 Unless exceptional circumstances are present that justify the preservation of the confidentiality of a decision to impose an administrative sanction, the decision to impose the sanction and the nature of the sanction must be made public. (If the decision was not appealed against or if appealed against, the appeal will confirm the decision.) 1.13 Any appeal against the decision of the Centre or supervisory body to impose administrative sanctions will have to be brought to an appeal board. The members of the appeal board are appointed by the Minister of Finance. 1.14 An appeal to the Appeal Board will not suspend the imposition of the administrative sanction, unless the chairperson of the Appeal Board directs otherwise. 1.15 Apart from the administrative sanctions, the Amendment Act creates offences relating to, for example, the failure by a person to comply with any reasonable request of an inspector in the exercising of his functions.

Written by: MARIA DAVEY