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What is FICA, its purpose and what FICA documents do you need?

The Financial Intelligence Centre Act (FICA) was passed into law in 2001. The main objectives are to combat money laundering and to assist in the identification of the proceeds of unlawful activities.  

Who is affected by FICA?

The majority of obligations under FICA apply to ‘accountable institutions'.

In Schedule 1 of this Act it is found that ‘accountable institutions’ include a practitioner who practices as defined in section 1 of the Attorneys Act 53 of 1979 and a person who carries on the ‘business of a bank’ as defined in the Bank Act 94 of 1990.

In addition to the accountable institutions, FICA affects all consumers entering into either a single transaction or a business relationship with an accountable institution.

Consumers include natural persons, foreign nationals, close corporations, South African companies and legal persons, such as partnerships and trusts.

What are FICA documents and how are the FICA requirements met?

As early as possible and preferably at or before the first meeting with a consumer, a practitioner must ascertain what information and documentation is required to be obtained from the customer in order to establish and verify the client’s identity. 

The identity verification process entails that the practitioner must compare the identifying particulars provided by the client with other available information in order to establish whether the particulars provided by the client accurately and correctly reflect the client’s identity. Property transfers often consist of high amounts of money, which makes FICA even more important in the conveyancing world. 

FICA documents include:

  • Copy of Identity Document (SA Citizens) / Passport (Foreign Nationals)
  • Proof of residential address less than three months old (for example utility bill, store account statement, bank document with residential address, DSTV account, municipal letter)
    • Should you not have proof of residential address in your name, you may provide a declaration by a third party confirming that you share a residential address with them and provide the third party's proof of ID and proof of residential address (less than three months old). 
  • Copy of SARS document confirming income tax number
  • Copy of bank document confirming individual banking details (less than three months old)
  • Marriage certificate, if the client is married
  • Antenuptial contract, should the client be married out of community of property
  • Company CIPC registration documents where a company is the customer
  • Letters of Authority and the Trust Deed, in the case of a Trust

The documentation required depends on the nature of the customer, as seen above.   With any juristic entity, the process of obtaining FICA is a lot more challenging as there are more documents required and more parties involved.

It is furthermore a requirement to retain records indicating the nature of the transaction concluded with the client, the amount of money involved, and the details of any bank accounts involved. This is best achieved by retaining a copy of the Deed of Sale and bank statements by the client for that period. FICA further requires all records to be kept for a period of 5 years from the date on which the transaction was concluded.

Velile Tinto Cape – Conveyancing Attorneys Cape Town

While there may be many acronyms you need to know, FICA is one of the important ones. Strict compliance with this Act is required, and a failure to do so, may result in sanctions being imposed on the accountable institution or customer involved in a transaction.

For more information regarding property transfers, deed of sales or the FICA process, please contact our attorneys in Cape Town.

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