{"id":5528,"date":"2024-05-15T06:00:00","date_gmt":"2024-05-15T04:00:00","guid":{"rendered":"http:\/\/www.thelife.digital\/tl\/?p=5528"},"modified":"2024-05-15T06:24:21","modified_gmt":"2024-05-15T04:24:21","slug":"why-all-the-new-red-tape","status":"publish","type":"post","link":"https:\/\/www.thelife.digital\/tl\/articles\/legal\/why-all-the-new-red-tape\/","title":{"rendered":"WHY ALL THE NEW RED TAPE?"},"content":{"rendered":"\n

UNDERSTANDING BENEFICIAL OWNERSHIP<\/strong><\/p>\n\n\n\n

By NIKITA KELLER and HESMARIE SWART (LVP ATTORNEYS)<\/strong><\/p>\n\n\n\n

But what is Beneficial Ownership and why should I care? <\/strong><\/strong><\/p>\n\n\n\n

Essentially, the ultimate \u2018warm\u2019 bodies that control the trust and stand to benefit from its assets and income will be considered to be the Beneficial Owners. A Beneficial Owner in respect of a company, means an individual who, directly or indirectly, ultimately owns that company or exercises effective control of that company<\/p>\n\n\n\n

The short answer is that if you have any interest, shares, control or stand to benefit from a trust or company, your details need to be on record at the Master of the High Court in the case of a Trust and at The South African Companies and Intellectual Property Commission (\u201cCIPC\u201d) in the case of a Company or Closed Corporation. The information will undoubtedly be used by enforcement agencies as data used to track and identify illicit use of trusts and companies by criminals, but ads a significant burden on South African Businesses.<\/p>\n\n\n\n

Why the sudden rush for information?<\/strong><\/strong><\/p>\n\n\n\n

In March 2023, South Africa was placed on the Financial Action Task Force (FATF)\u2019s \u201cgrey list\u201d of countries with strategic deficiencies in their anti-money laundering and counter-terrorist financing regimes and identified weaknesses that needed to be addressed.<\/p>\n\n\n\n

The above resulted that the South African government published the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022 that came into effect on 1 April 2023.

The Amendment Act is aimed at combatting money laundering and terrorism financing. It targets companies and trusts which are seen by the international community as vehicles regularly used to facilitate such criminal activities. To create greater transparency in the ownership and control of such entities, it has introduced the concept of \u2018beneficial ownership\u2019 in a number of key laws affecting all trusts and companies, adding additional disclosure and reporting. <\/p>\n\n\n\n

Who needs to comply? <\/strong><\/strong><\/p>\n\n\n\n


The new definition of \u2018beneficial owner\u2019 in the Trust Property Control Act 57 of 1988 (\u201cTrust Act\u201d), is defined broadly and includes any of the following:
      <\/p>\n\n\n\n