06/03/23

SOUTH AFRICA: Beneficial ownership register to come into force in April.

As published on step.org/industry-news, Monday 6 March, 2023.

South Africa's Companies and Intellectual Property Commission has announced that compulsory registration of trust and company beneficial ownership will take effect on 1 April 2023.

The prompt implementation of key measures in the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act No. 22 of 2022 (the Act), which received assent on 29 December 2022, has been accelerated by the Financial Action Task Force’s (FATF’s) decision to place South Africa on its list of jurisdictions under increased monitoring. FATF's assessment of South Africa's anti-money laundering (AML) regime identified the need to give competent authorities timely access to accurate and up-to-date beneficial ownership information as one of its main remedial aims.

The new Act amends, among other things, the regulation of beneficial ownership disclosure in terms of the Companies Act 71 of 2008 (the Companies Act), the Trust Property Control Act 57 of 1988, and the Financial Sector Regulation Act 9 of 2017. The amended sections 50 and 56 of the Companies Act mean that all unregulated companies will have to record and update beneficial ownership information in their own securities registers. Regulated companies must file the information directly with the Companies and Intellectual Property Commission, as well as maintain their own registers. Non-compliance could result in a court-ordered administrative fine of 10 per cent of the entity's turnover or ZAR1 million, whichever is greater.

The Act also amends the Trust Property Control Act 1988 by requiring trustees to keep a record of trust beneficiaries, agents and advisors and report it to the Master of the High Court’s office of the trust. The Master will in turn maintain a register of this information and make it available 'to any person as prescribed'. The exact details to be provided and the persons to whom it must be disclosed will be determined by the Minister of Finance

Trustees who fail to comply can be fined up to ZAR10 million or jailed for five years. The Act also gives Masters powers to remove trustees if they are judged to have performed unsatisfactorily, refused a lawful request, been convicted of dishonesty, bankrupted, declared mentally incapable or failed to give sufficient security.