Task 3 Activity 2.6 a) In scenario A the estate agent was unable to identify who the third party was who deposited an amount of R2.5 million as deposit. This is a very large sum to just be deposited. The fact that the agent was unable to identify this 3rd party is also very suspicious and may be due to the fact that this 3rd party wanted to launder money. In scenario B all of the relevant documentation has been signed by the purchaser but suddenly before the transaction is concluded the name of purchaser changes. Thus Just Property has no required documentation for this person. b) In both these scenarios it is important for the estate agent to report these events to the MLRO. The MLRO then has a legal responsibility to report these two scenarios to FIC but first we have to evaluate the two scenarios and see whether they fit into the below and is eligible to be submitted to FIC: - - - - If the business has or is about to receive the proceeds of unlawful activities. In neither scenarios it is unclear to say. A transaction or series of transactions that facilitates or is likely to facilitate the transfer of the proceeds of unlawful activities. If someone is able to deposit a cash amount of R2.5 it is most likely due to unlawful activities Scenario A. Any transaction or series of transactions that has no obvious business or lawful purpose. In both scenarios it is unclear to say. Any transaction or series of transactions that are concluded in such a way as to avoid giving rise to a reporting duty under the FICA. In scenario B it is clear that the person wanted to avoid providing the relevant documentation and suddenly changed their name. Any transaction or series of transactions that appears to be an evasion or attempt to evade the duty to pay any tax, duty or levy imposed by the SARS. This could be both scenario A and B. If the business has been used or is about to be used in any way for the purpose of money laundering. It is unclear to say for both scenarios. c) Scenario A Even though this transaction has fallen through, it was the duty of the estate agent to obtain the identification of the 3rd party who deposited the large amount. This party is now a part of the sale transaction and all of the relevant information has to be submitted to Just Property in terms of his identification documents, source of income, tax registration number and proof of residency. The action to be taken is to get in contact with both the purchaser as well as the 3rd party and see what their business relationship is. It is also important to document these suspicions and provide training to the relevant estate agents so that they do not make the same reckless mistakes again and obtain all relevant FICA documentation. After this scenario is evaluated and it is still considered suspicious, it has to be reported to FIC. The fact that the deposit amount was such a large sum is grounds alone to report it to FIC. Scenario B This scenario is extremely suspicious as I assume all of the relevant identification documents have already been acquired for the purchaser. It must have been clear to estate agent that as per her ID documentation, the purchaser’s full names are correct. Seeing as the purchaser wanted to change her name suddenly, the relevant documentation has to be provided in order for this to happen. It is not possible for the sale transaction to continue as the property is not being transferred into the agreed upon person’s name. A new sales agreement has to be drawn up and signed by both the purchaser and the seller and the process has to start from the beginning in order for this to be valid. It is important for the agent to identify and verify the purchasers new name for example if the purchaser originally was Chelsea Viljoen but then suddenly changes her name to Chelsea Anne Viljoen, the relevant documentation to support this has to be given. If this documentation is given, how is it possible for the agent to overlook at the purchaser has a second name? Relevant training has to be given to the agent in order for this not to happen again as she should not have continued with the sale without following the above steps. d) The above submitted reports to the FIC are confidential but Just Property is not obliged to keep a copy of this report. If a copy of the report has been kept, it has to be kept in a safe place due to it being confidential. The office safe might be a good place to store it or a storeroom that is only accessible by the MLRO, office manager and principal.
