Law societies sign MoUs with FIC

September 1st, 2013
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By Barbara Whittle

At the end of July the four statutory provincial law societies – the regulatory bodies for attorneys and the supervisory bodies in terms of the Financial Intelligence Centre Act  38 of 2001 (FICA) – signed memoranda of understanding (MoUs) with the Financial Intelligence Centre (FIC) in terms of s 45(1D) of FICA.

‘The MoUs are a significant step for the legal profession in South Africa. The provincial law societies have now taken on the additional mantle of supervisory bodies in terms of the FIC Act, which increases their regulatory functions over attorneys. This is indicative of a commitment to professionalism and ethi­cal behaviour among practising attorneys,’ said David Bekker, co-chairperson of the Law Society of South Africa and chairperson of its FIC committee in a press release issued on the signing of the MoUs.

Practising attorneys are obliged to register with the FIC in terms of s 43B of FICA.

‘We believe that approximately 10 000 attorneys’ firms should be registered with the FIC,’ said Murray Michell, director of the FIC in the press release. He added: ‘We urge practising attorneys who are not yet registered with the FIC to do so.’

Attorneys are regarded as accountable institutions in terms of FICA. Besides having to register with the FIC, as accountable institutions they are also obliged to report suspicious and unusual transactions (STRs) to the FIC. The reporting of STRs is geared towards drawing the FIC’s attention to financial transactions that may suggest the possibility of criminal activity, so that further investigation can take place if necessary.

‘We are aware that attorneys are particularly vulnerable to the possibility of being used by criminals,’ said Mr Michell. ‘Trust accounts are an obvious target for the laundering of money. Attorneys could, for example, find themselves unwittingly facilitating criminal behaviour when involved in the transfer of a property bought with illicit funds.’

Any business activity that appears to be suspicious should similarly be reported. So, too, when a practising attorney suspects that his or her client’s property may be linked to terrorist activities.

A number of other compliance obligations apply to practising attorneys, including the appointment of a compliance officer, the training of staff and the duty to keep record of transactions.

Mr Bekker noted: ‘In their roles as supervisory bodies, the provincial law societies will undertake to train practitioners and keep them up to date regarding communication from the FIC. The law societies will also undertake to carry out regular random inspections of attorneys.’

‘We are thrilled to welcome the law societies into our fold,’ said Mr Michell.  ‘The FIC has concluded 12 MoUs with other supervisory bodies. We look forward to fruitful collaboration in the years ahead.’

Compiled by Barbara Whittle, communications manager, Law Society of South Africa, barbara@lssa.org.za

This article was first published in De Rebus in 2013 (Sept) DR 14.

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