Fica deadline

Accountable institutions involved such as law firms, estate agencies and casinos have until 30 June this year to identify and verify the identity of existing and new clients. The size of the task and the obligation to freeze the accounts of everyone who has not provided them with proof of identification and residence by June 30 could lead to total chaos, according to Claire Gebhardt-Mann, a spokesperson for the Banking Council which has asked for an extension.

Since people in lower income groups do not have a fixed residential address, nor Telkom or electricity accounts, banks have relaxed their requirements and now accept Television licenses, cellphone accounts and sworn affidavits. The Banking Council has also approached the Government to allow identity documents, municipalities and voter's rolls as proof, together with credit checks if necessary.

Professor Louis de Koker, head of Rand Afrikaans University's Centre for the Study of Economic Crime, maintains that the verification process has become so diluted as to become meaningless. What was necessary was to have good information on high-risk clients.

This suggests a risk-based approach to verification where, "the balance between the accuracy of the verification required on the one hand, and the level of effort to obtain such verification on the other, has to be commensurate with the nature of the risk involved in a given business relationship or transaction".

Full articles on:
IOL and the Sunday Times