Property Practitioners are Reminded to Report Suspicious Transactions to the FIC
The Property Practitioners Regulatory Authority (PPRA) issued a reminder and guidance to property practitioners relating to the obligation to report suspicious transactions to the Financial Intelligence Centre (FIC). In a bid to combat money laundering and terrorist financing, property practitioners are under strict instructions from the FIC to enhance their vigilance and reporting protocols. Given the high-value nature of property transactions, this sector is particularly susceptible to criminal exploitation.
Key Reporting Obligations:
Register with the FIC: All property practitioners must register with the FIC to obtain an organisational identification number (ORG ID). This is a prerequisite for fulfilling any subsequent reporting duties.
Report Suspicious Activities: Practitioners are required to report any suspicious or unusual transactions, regardless of the transaction amount, within 15 days of detection. This is done as and when the suspicious activity comes into the attention of the property practitioner. It is not an annual reporting responsibility.
Targeted Financial Sanctions: It is critical to check if clients or entities are listed on the FIC's Targeted Financial Sanctions (TFS) list, and to avoid any transactions with them, including property freezes.
Risk and Compliance Returns: Annual submissions of risk and compliance returns are mandatory for each branch with an ORG ID. These help the FIC assess potential risks and ensure compliance.
Examples of Indicators of Suspicious Transactions:
Reluctance or refusal to provide personal identification.
Substantial cash payments or dealings through unorthodox financial channels.
Transactions that do not match the client’s apparent financial standing.
Frequent and quick buying or selling of properties, suggesting potential money laundering.
Sale prices significantly deviating from market values, possibly indicating improper value transfers.
Use of different middlemen or legal structures for transactions, potentially to obscure real ownership.
Properties with intricate or opaque ownership layers, often involving secretive jurisdictions.
Clients avoiding personal interactions and preferring anonymous communication methods.
Resources and Assistance:
Public Compliance Communication 56 (PCC 56) of the FIC provides specific guidance for property practitioners.
Property practitioners can seek further help through the FIC’s compliance contact center on +27 12 641 6000 or by submitting online compliance queries.
Note that these reports are based on suspicion alone, practitioners are not required to prove the criminal nature of the funds involved. This initiative is part of a broader effort to maintain the integrity of the financial system and protect it from criminal misuse.
