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Fica rules of thumb

22 July 2004

These guidelines, as approved by the Law Society of South Africa (LSSA) are rules of thumb only. Their application has to be assessed on the facts of each particular matter to which they apply. In summary then these guidelines include:

The duty to inform
Attorneys should advise their existing and new clients, as a matter of course, of the nature and extent of their Fica reporting duties and see to it that they understand the distinction between privileged and confidential information. An appropriate warning in an engagement letter is a practical way of informing clients of their rights.

The duty to advise
When a client advises an attorney of a proposed course of conduct that may, if proceeded with, give rise to a reporting duty in terms of Fica, and the communication is not privileged, an attorney will not be precluded from advising the client that the proposed course of conduct is unlawful and should not be persisted with.

The right to withdraw
The provisions of Fica do not impact on an attorney's ethical right and duty not to accept an unlawful mandate from a client or to withdraw from a matter. An attorney can even continue working for a client after making a report to the Centre, particularly where the matter reported is relatively trivial. If the attorney finds that continuing to act for a client might constitute a money-laundering offence, it would probably be best to discontinue the professional relationship as soon as possible, but each case must be decided on the circumstances.

The scope of the privilege
The client is entitled to expect that information, which would otherwise be reportable and is disclosed to the attorney as part of the process of providing instructions to the attorney for the purpose of obtaining advice or within the litigation privilege, will not be reported to the Centre.

The guidelines endorsed by the LSSA should not be confused with the "guidance notes" referred to in the regulations to Fica. In essence, the guidance notes advocate a risk-based approach in which, as the risk increases, given the risk profile of the client, so must the level of verification.

Practitioners should, however, refer to the guidance note only where doing so is permitted by the regulations. And the Centre suggests in the guidance note that accountable institutions create a risk matrix which would:
"serve as a tool to provide an objective basis to the assessment of several risk indicators".
An example of such a risk matrix is annexed to the guidance note.

De Rebus website

Financial Intelligence Centre website

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