Anyone who has ever tried to open a bank account, get a loan, take out a cell phone contract, buy a car/home (and almost anything else to do with a bank account) has experienced the FICA hassle: “Do you have proof of residence, proof of income and a copy of your ID?”.
FICA stands for The Financial Intelligence Centre Act 38 of 2001 (“FICA”) which was introduced in South Africa to govern financial intelligence and to assist in the combatting of financial crime by eliminating the possibility of money laundering from a transaction. All entities classified as “accountable institutions” in terms of FICA must comply with FICA, these include banks, long-term insurance businesses, money lenders, foreign exchange, estate agents etc.
FICA is essentially a means to ensure that an institution is required to ”get to know the client”. Accountable institutions have the responsibility;
- to establish and verify the identity of the client; and
- if the client is acting on behalf of another person, to establish and verify his authority, as well as the identity of that other person;
Whenever an accountable institution establishes a business relationship, or concludes even a single transaction with a client, it must keep record (in hard copy or electronic, for 5 years) of:
- the identity and authority as explained above;
- the manner in which the identities were established;
- the nature of that business relationship or transaction;
- the amount involved and, the parties to the transaction;
FICA DOCUMENTS REQUIRED
- Copy of ID 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)
- Copy of SARS document confirming income tax number
- Copy of bank document confirming individual banking details (less than three months old)
- Copy of Trust deed (if applicable, any deeds of amendment of Trust Deed)
- Copy of Letter of Authority
- Copy of SARS document confirming Income tax / VAT registration number for trust
- Resolution signed by all Trustees nominating authorised signatory / representative
- Copy of bank document confirming trust account banking details (less than three months old)
- Proof of source of funds.
- Company CIPC registration documents
- Proof of business address (less than three months old), if different from registered address
- Copy of SARS document confirming Income tax / VAT registration number for company
- Resolution on company letterhead signed by all directors nominating authorised signatory / representative
- Copy of bank document confirming company banking details (less than three months old)
- Register of shareholders / written statement from the entity showing ownership and control structure of the company (shareholding diagram)
- Proof of source of funds.
It is a good rule of thumb to always make sure institutions that deal with your financial matters have your latest information and contact details. If the name on your ID has changed – either through marriage or divorce or a name change – or you’ve moved and your physical address has changed, make sure your bank etc. knows about it. Also update your service providers with new contact information, people often move from job and then have a new email address or contact number. The service provider could be sending important information to an email address that is no longer being attended to. Other advice would be to ensure that ID/Passport copies are clear, preferably in colour. Having an ID copy that is blurry or too dark is of no use and will be rejected as it is not a reliable source. Proof of bank account and address also has to be less than 3 months olds for it to be valid and accepted under FICA legislation, and the address must be that of a residential property and not a Post box. Bank statements has to reflect name as well as account number.
What seems as a ‘hassle’ is in fact, apart from legislative, a good way to ensure that everyone is being treated fairly and safely and at the end of the day it keeps out the “bad guys” and “dirty money”. The majority of criminal activities are based on one goal – Money! If money is generated by crime, it is useless unless the original tainted source or intended usage of funds can be disguised as it could connect the criminals to the illegal activity and law enforcement officials would seize it.
FICA has resulted in the reduction in all sorts of fraud and identity theft, drug trafficking, arms smuggling etc. Next time you get asked for FICA, just know that you are doing your part in keeping a safe financial environment for all!