The General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022 (“Act”) comes into force on 1 April 2023 and amends the following legislation:
- Trust Property Control Act
- Nonprofit Organisations Act
- Financial Intelligence Centre Act
- Companies Act 71 of 2008
- Financial Sector Regulation Act
Please see below the amendments to the Trust Property Control Act and Companies Act which will have a direct impact on commercial attorneys:
Trust Property Control Act:
- A new definition of beneficial owner has been inserted and includes natural persons who:
- own and control trust property
- have effective control over the trust or trust property
- all founders of the trust
- all trustees of the trust
- named beneficiaries of the trust
- if any of the above persons is a juristic person, then the person who represents that juristic person is included in this definition
- New grounds for disqualification of trustees have been inserted:
- Unrehabilitated insolvents
- All disqualified parties under the Companies Act
- Anyone convicted of misconduct involving an element of dishonesty (for a period of 5 years, subject to extension)
- Anyone convicted under FICA, the Companies Acr, the Insolvency Act, Financial Markets Act, Prevention of Combatting Corrupt Activities Act, Tax Administration Act
- Anyone on the UN Securities Council Sanctioned persons list.
- Unemancipated minors / persons with a similar legal disability
- A new obligation on trustees under section 10 of the TPCA to disclose their position as trustee to any accountable institutions (as defined under FICA) and that the transaction relates to trust property.
- A new obligation on trustees under section 11 of the TCPA to keep a record of prescribed details of all accountable institutions authorised to act as agent to perform trustee functions (i.e. a register of the trust’s authorised agents – e.g. attorneys).
- A new obligation on trustees under section 11A of the TCPA to keep a record of prescribed details of beneficial ownership of the trust, which record must be lodged with the relevant Master’s Office and kept updated/updated lodged with the Master’s Office. Failure to lodge the record post-request by the Master could lead to a fine of R10m or 10 years imprisonment, upon conviction.
- A new definition of beneficial owner has been inserted and includes natural persons who have effective control, including:
- The holding of beneficial interests in the securities of the company
- The exercise of or control of exercise of voting rights
- The ability to appoint or remove directors
- The ability to materially influence the management control or decisions
- Any persons who can exercise the above through a chain of ownership or control
- A new definition of affected company to include regulated companies and all their subsidiaries and holding companies (i.e. if one in the chain is a regulated company, then all are affected companies).
- Together with the submission of annual statements to CIPC, the company’s securities register must be submitted, as well as a register of beneficial owners. Any updates or changes must also be submitted periodically.
- An affected company must keep a register of disclosures of beneficial interests held on behalf of another person as well as a register of persons who own multiples of 5% (sec 56).
- All companies must have a register of beneficial owners; file same with CIPC; and file notices of any changes with CIPC (sec 56(12))
- Affected companies must include a list of holders of multiples of 5% in its annual financial statements.
- The disqualification of directors has been expanded in line with the list of disqualifications in the TPCA. The list also includes any person convicted of an offence pertaining to money laundering, terrorist financing, or proliferation of financial activities.