South Africa "Greylisted" by FATF

By BVK Group | 19 May 2023

The way forward for Companies, Close Corporations & Trusts in terms of compliance.

Plans are underway to improve the way companies disclose their ownership information. This is important because it helps fight financial crimes like money laundering and corruption. The Companies and Intellectual Property Commission (CIPC) has said they will start collecting and storing this information as soon as regulations are in place. Basically, the true owner of a company or organization should be known without any complicated ownership structures getting in the way. This will allow law enforcement agencies to track the flow of money and prevent companies from being used as fronts for criminal activities. It will also help to mitigate the abuse of corporate vehicles to facilitate financial crime and ensure that the ultimate beneficial owners of entities on its register are known.

In March 2022, the Financial Action Task Force (FATF) updated their rules about beneficial ownership transparency, which is what South Africa is working to improve. In October 2021, the FATF evaluated South Africa's anti-money laundering and counter-financing of terrorism laws and found 67 areas that needed improvement. Even though the country tried to fix these issues, they still ended up on the FATF's increased monitoring list. (We were greylisted). Now, one of the things South Africa needs to do is make sure that authorities can access up-to-date ownership information and enforce penalties for companies that don't comply. This will help make the country's financial system more secure and transparent.

CIPC is not alone in announcing that it will soon implement a beneficial ownership (BO) information collection and storage regime, as required by the Financial Action Task Force (FATF). Both SARS and the Master of the High Court have also announced and have implemented additional information collection and storage registries as BO transparency is important in fighting financial crime allowing law enforcement agencies to work against money laundering, tax evasion, corruption, and other financial crimes.
The General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022 was passed to amend the Companies Act and to give the CIPC a mandate to collect BO information. When the relevant regulations are promulgated, the CIPC will implement the collection of BO information.

Directors, Members, and Trustees will be obliged and are responsible to ensure compliance.
At BVK we have been and are proactive in collating the information and registers for our clients and will assist owners, directors, members, and trustees to ensure that the required certification is obtained.
Call our statutory and compliance offices for assistance in this regard.