Pretoria – The Ministry of Justice and Correctional Services has announced the effective implementation of the amendments to the Trust Property Control Act, 1988 (Act No. 58 of 1988) by the General Laws (Anti Money-Laundering and Combating Terrorism Financing) Amendment Act, 2022 (Act No. 22 of 2022) (“the Amendment Act”).
The President of the Republic of South Africa proclaimed 1 April 2023 as the commencement date of sections 1 to 8 of the Amendment Act.
Accordingly, the Minister of Justice and Correctional Services made regulations that were published in the Government Gazette No. 48351 on 31 March 2023 (“the Regulations”) to facilitate the implementation of the Amendment Act.
The Amendment Act seeks to address the shortcomings in beneficial ownership transparency in South Africa’s regulatory framework.
South Africa is obliged, as a member of the Financial Action Task Force (FATF), to ensure that its regulatory environment is geared towards international standards in anti-money laundering and combating the financing of terrorism.
According to the Amendment Act, a trustee commits an offence if they fail to –
(a) disclose to an accountable institution that they engage within the capacity of a trustee, that the relevant transaction or business relationship relates to trust property;
(b) record the details of accountable institution prescribed in regulation 3B;
(c) establish and record the beneficial ownership information of a trust prescribed in regulation 3C;
(d) keep an up-to-date record of the beneficial ownership information prescribed in regulation 3C; or
(e) lodge a register of the beneficial ownership information prescribed in regulation 3C with the Master of the High Court.
“Members of the public who do not comply with the Amendment Act will face harsher punishment if they are found guilty in a court of law,” warned the Ministry of Justice and Correctional Services in a statement released Thursday.
“A trustee who is convicted of any of the offences referred to above will be liable to a fine of up to R10 million, or imprisonment for a period of up to five years, or to both such fine and imprisonment.
“The Trust Property Control Act, 1988 did not provide for reporting on beneficial ownership and hence, had no prescribed penalties for non-compliance prior to the amendments.”