Estate agent? Or government spy...

The government’s Financial Intelligence Centre Act (Fica), aimed at combating money laundering, fraud and tax avoidance, is turning estate agents into government agents, says SA chairman of Sotheby’s International Realty, Lew Geffen. ‘Obviously, any rational person who gets paid R1m or more in notes would be duty-bound to report it. Well, I know I would, and I think any person who is knowingly guilty should be penalised,’ says the man whose clients rank amongst the highest net worth individuals in the world.

While Geffen has no problem with Fica’s stipulation that estate agents, attorneys, bankers and other ‘accountable’ parties secretly report any ‘unusual’ or ‘suspicious’ transactions to the centre, it’s the privacy issue he is particularly annoyed with. ‘It’s the invasive nature of the act which is not friendly to agents, their clients or the industry as a whole,’ he says of the requirement for recording sensitive financial information. ‘Obviously, we need to obtain this information to facilitate transactions, but our clients are now reluctant to provide it, because we’re now not allowed to keep it confidential.’ Reacting to feedback from his agents in the field, Geffen claims that this has more to do with security considerations than covering illegitimate transactions. ‘My agents have had several complaints from clients who feel uncomfortable about giving out sensitive information without any certainty about who has access to it, and for how long.’

The Act, which came into play at the end of last month (June 30) stipulates that accountable institutions establish and verify each client’s identity, proof of residence and maintain detailed records of financial transactions for five years, along with setting up internal training procedures to educate staff on the Act’s requirements, appointing compliance officers and creating a system to monitor compliance. But Geffen is caustic of its implementation. ‘While it won’t affect the property market as such, it’s more of an inconvenience we could well do without,’ he asserts, pointing out that it’s the financial institutions that should be largely accountable for any irregularities. ’It all starts and ends with the banks, especially money laundering, and I think government should take more consideration into tightening up procedures at the banks. In the States, for instance, every transaction over $10 000 is reported, but I don’t think any estate agents in America have to report to the government.’ And Geffen is positive that other estate agents would agree with him. ‘We all speak with the same voice. Anyone who doesn’t agree with me has to be a government agent.’

*Cape Town estate agent Tyrone Selmon is more resigned to the idea. ‘I suppose the biggest irritation is that there’s a lot of administration and paperwork involved, and it does mean we’re being governed by a stronger arm, which is not a bad thing, as there certainly was a lot of money laundering, cash changing hands, which was definitely out of the loop.’

Words: Lucinda Jordaan -