SA industries respond to FIC greylisting allegations

The South African property industry has found itself under scrutiny after the Financial Intelligence Center (FIC) accused certain sectors of non-compliance, threatening the country's exit from greylisting. In a recent interview on CNBC Africa, Dineo Mphahlele, Executive Manager at the Property Practitioners Regulatory Authority (PPRA), shed light on the accusations and the industry's response to the allegations. Mphahlele highlighted the importance of compliance with the FIC Act and emphasized the collaboration between PPRA and FIC to ensure adherence to regulations within the property sector. Despite challenges in enforcement, Mphahlele discussed initiatives aimed at improving compliance levels and addressing the issues faced by non-compliant members of the industry. The FIC's recent public statement called out estate agents specifically for their lack of cooperation in meeting compliance requirements. Mphahlele acknowledged the focus on estate agents within the property sector and stressed the need for enhanced communication and collaboration to achieve compliance. While PPRA no longer holds supervisory powers, Mphahlele mentioned the existing Memorandum of Understanding (MOU) with FIC to facilitate compliance monitoring and enforcement efforts within the real estate industry. One of the key points raised by Mphahlele was the distinction between compliant and non-compliant members of the industry. With approximately 66% of estate agents reported to be compliant, there remains a significant 34% that have yet to adhere to the FIC's regulations. Mphahlele highlighted the potential consequences of non-compliance, including sanctions and penalties that FIC is authorized to impose under the legislation. The ongoing communication and education efforts by PPRA aim to raise awareness among real estate agents regarding their legal obligations and the repercussions of failing to comply. In response to queries about the reasons behind non-compliance, Mphahlele emphasized the need for thorough compliance inspections to understand the perspectives of the members in question. Whether attributed to rogue agents, capacity constraints, or educational gaps, the industry seeks to address underlying issues to improve overall compliance levels. Collaboration between PPRA and FIC through joint inspections and training programs could help bridge the gaps and ensure better adherence to the FIC Act. As South Africa navigates the challenges posed by greylisting threats, the property industry remains under pressure to enhance its compliance practices and safeguard the country's financial integrity. Continued efforts to engage with industry stakeholders, provide guidance on regulatory requirements, and enforce compliance measures will be crucial in addressing the concerns raised by the FIC and strengthening the regulatory framework within the property sector.