FICA at First Glance

FICA at First Glance

The term FICA is an acronym for Financial Intelligence Centre Act, which refers to the Act that regulates FICA.

Author: Zoe Dickenson

We’ve all heard this term before. And we’ve all felt that pang of annoyance when asked yet again to produce our proof of address (with the all important, not older than 3 months clause) when trying to conclude certain transactions. Whether it is buying a new cell phone, or renewing your car’s license, FICA has become a part of everyday life. But what is the purpose of FICA? What does it actually mean? And why is it so necessary? In this article I will delve into the ins and outs of FICA, the importance behind it as well as the required documents when asked to produce FICA.

The term FICA is an acronym for Financial Intelligence Centre Act, which refers to the Act that regulates FICA. The Financial Intelligence Centre Act 38 of 2001, came into effect on 1 July 2003, and sought to aid in the fight against Fraud, Money Laundering and other illicit criminal activities.[1] The purpose of the Act is to assist in the verification of identities and to ensure that funds used in large transactions are of a legitimate source. The Act further aims to oblige Financial Institutions to keep accurate records of clients, flag and report suspicious individuals and transactions as well as ensuring that South Africa is compliant with International Framework governing financial transactions.[2] Financial Institutions thus have a legal duty to comply with the Act. Failure to comply with the Act can result in imprisonment (up to 15 years) and or a fine (up to R1 000 000.00).[3]

According to the Act, the required FICA documents differ depending on the legal personality of the entity. Below I will set out the required FICA documentation for the four most common types of legal personalities, according to the Act:[4]

INDIVIDUALS

  • Identity Document;
  • Marriage Certificate (if applicable);
  • Proof of residential address (not older than three months);
  • SARS income tax number; and
  • Bank confirmation as proof of Bank Account (not older than three months)

CLOSE CORPORATIONS

  • Founding Statement;
  • Proof of registered address (not older than three months);
  • SARS Income tax / VAT registration number;
  • Resolution signed by all members electing a duly authorised representative;
  • Bank confirmation as proof of Bank Account (not older than three months); and
  • Authorised representative and each Member of the Close Corporation:
    • Identity Document; and
    • Proof of residential address (not older than three months)

TRUSTS

  • Trust deed;
  • Letter of Authority;
  • SARS Income tax / VAT registration number;
  • Resolution signed by all Trustees electing a duly authorised representative;
  • Bank confirmation as proof of Bank Account (not older than three months);
  • Authorised representative and each Trustee:
    • Identity Document; and
    • Proof of residential address (not older than three months)

COMPANIES

  • CIPC registration documents;
  • Proof of Registered address (not older than three months);
  • SARS Income tax / VAT registration number;
  • Resolution signed by all directors electing a duly authorised representative;
  • Bank confirmation as proof of Bank Account (not older than three months); and
  • Authorised representative and each Director
    • Identity Document; and
    • Proof of residential address (not older than three months)

[1] https://www.banking.org.za/consumer-information/consumer-information-legislation/financial-intelligence-centre-act/

[2] https://www.banking.org.za/consumer-information/consumer-information-legislation/financial-intelligence-centre-act/

[3] https://www.banking.org.za/consumer-information/consumer-information-legislation/financial-intelligence-centre-act/

[4] Financial Intelligence Centre Act 38 of 2001

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