Categories: News

South Africa Boosts Business Transparency: New Beneficial Ownership Rules Target Hidden Criminals

Published by
William Dube

The Financial Intelligence Centre (FIC) has announced significant changes to South Africa’s beneficial ownership framework, aimed at increasing transparency in business operations and making the nation less appealing to criminal enterprises. This decision follows a collaboration workshop between the FIC and the United Nations’ Southern Africa Office of Drugs and Crime, where Xolisile Khanyile, the FIC’s director, discussed methods and tools for accessing beneficial ownership data in investigations into suspicious corporate activities.

  1. The Financial Intelligence Centre (FIC) has announced changes to South Africa’s beneficial ownership framework to increase business transparency and deter criminal activities.
  2. Aligning the country’s investigative powers with international standards, such as those set by the Financial Action Task Force (FATF), will help prevent illicit actors from using legal entities to conceal proceeds from criminal acts.
  3. In response to the FATF’s concerns, South Africa has enacted the General Laws Amendment Act and plans to establish a register of beneficial owners, aiming to improve the beneficial ownership framework and access to accurate information.

The FIC is now focused on revamping the system through which trusts, companies, and partnerships can be investigated in relation to stakeholders and their involvement in various corporate vehicles. Khanyile emphasized that authorized access to beneficial ownership information would substantially aid efforts in safeguarding the financial system from illicit use.

Understanding the legal and beneficial ownership of corporate entities is a critical aspect of assisting competent authorities, particularly law enforcement agencies and the FIC, in identifying individuals involved in criminal activities through companies or trusts. A beneficial ownership framework consists of regulations, policies, and procedures designed to identify the true owners of an entity or asset. These policies require companies to provide information about their beneficial owners, which refers to individuals or groups that ultimately have control or ownership over a financial institution, regardless of whether the company is registered under their name.

Khanyile stated that aligning South Africa’s investigative powers regarding beneficial ownership with international standards would hinder illicit actors’ ability to use legal entities to hide proceeds from criminal activities. The Financial Action Task Force (FATF), an international watchdog, has recently strengthened its standards on beneficial ownership of legal persons to enhance prevention and deterrence of issues concerning legal entities. Consequently, law enforcement agencies worldwide must ensure they possess the necessary authority to obtain beneficial ownership information from companies.

The FATF had previously greylisted South Africa due to its subpar regulations covering money laundering and other financial crimes. The country’s beneficial ownership framework faced criticism from the FATF, as it was deemed inadequate in providing timely access to accurate and comprehensive beneficial ownership information, according to the FIC.

In response, the recently enacted General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act (General Laws Amendment Act) has introduced several changes to the beneficial ownership framework. Amendments have been made to multiple functional pieces of legislation, adding definitions of a beneficial owner to align the concept of beneficial ownership with international standards.

The Companies and Intellectual Property Commission (CIPC), which oversees approximately 2.1 million companies in South Africa, has also announced its intention to establish a register of beneficial owners. This move is expected to significantly improve the country’s beneficial ownership framework and address the concerns raised by the FATF, ultimately enhancing transparency and impeding criminal activities that seek to exploit corporate vehicles in South Africa.

William Dube

William Dube is a finance and economic news expert with over 10 years of experience in economic anaylsis, financial product assessment and market analysis. With a numerous certificates from prestigious universities including but not limited to Yale University and the University of Pennyslivenia. William specializes in providing insightful news developments in South Africa and commentary on investment strategies, risk management, and global economic trends. You can contact him on