On 29 December 2022, the President of the Republic approved the amendments to the Act in terms of the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act No. 22 of 2022 (Amendment Act).
Amongst the assented amendments, some of the notable amendments surrounding beneficial owners of trusts include the recording and maintaining of information of beneficial owners by the trustees, the lodgement of information registers of beneficial owners by trustees with the Master of the High Court (the Master) and the availing of the information of beneficial owners to accountable institutions by trustees.
The aforesaid amendments commenced on 1 April 2023 and include amongst othersthe insertions to the Act, the definition of the term beneficial owner, the specification of information that must be kept by trustees in respect of beneficial owners of trusts, the Master’s duty to maintain a register containing information relating to beneficial ownership of trusts, the provisions of access to information regarding beneficial ownership, and the specification of certain offences in the event of non-compliance with the Amendment Act. To facilitate the implementation of such amendments we rely on the regulations published in the Government Gazette No 4835 on 31 March 2023 for guidance.
Following the above, the key focus and questions then becomes, who qualifies as a beneficial owner of a trust, whether the trustees of a trust are required to disclose the details of such a beneficial owner and if so to what extent.
In terms of the Amendment Act, the answer to who qualifies as a beneficial owner is found in the definition itself as the term “beneficial owner” in respect of a trust instrument means a natural person who directly or indirectly ultimately owns the relevant trust property, a natural person who benefits from the trust property, or a natural person who exercise effective control of the administration of the trust arrangements that are established pursuant to a trust instrument.
Once a beneficial owner of a trust has been established and identified, the Amendment Act and the regulations then place an obligation on the trustees of a trust to keep an up-to-date record of the information of the beneficial owners and to lodge a register of such a record with the prescribed information of beneficial owners of trusts with the Master. Such prescribed information includes amongst others, the full names, date of birth, nationality, an official identity document or passport number, citizenship and residential address in respect of each beneficiary.
In addition to the above obligations, the trustees are further required in terms of the Amendment Act, to make the information contained in the beneficial ownership registers available to listed entities and authorities which amongst others includes the National Prosecuting Authority, the Special Investigation Unit and the South African Revenue Services.
Therefore, it is the duty of all trustees to familiarise themselves with these defined amendments as a trustee commits an offence if such a trustee fails to keep an up-to-date record of the beneficial ownership information and lodge a register of such beneficial ownership information with the Master as set out above. Such a trustee can be found guilty of an offence and liable for a fine of up to R10 million, or imprisonment for a period of up to five years or both.
It becomes clear from the above that the purpose of the Amendment Act is to ensure transparency with regard to the ownership of trust property and to provide assistance in the investigation of financial crimes such as money laundering.
By Makhokha Makhokha and Mbali Molaoa
Makhokha Makhokha is an Associate in the Mergers and Acquisition Department at TGR Attorneys. He holds an LLB degree from the University of Johannesburg.
Mbali Molaoa is a Candidate Attorney in the Mergers and Acquisition Department at TGR Attorneys. She holds a BA Law and an LLB degree from the North-West University.