Category: Tax A Lert | 15/11/2024 30 November 2024 30/11/2024 BO Beneficial Ownership Compliance Deadline Register Trust Property Trustee Trusts 15 November 2024
The South African Department of Justice and Constitutional Development (DoJCD) recently announced key updates regarding compliance requirements for trustees, focusing on Beneficial Ownership (BO) Registers. This article clarifies the necessary steps trustees need to take to comply with the Trust Property Control Act's amended requirements. The updates, effective as of April 2023, introduce stricter compliance expectations and heavier penalties to combat financial misconduct. Here’s what you need to know to ensure compliance with the amended regulations.
Key Compliance Deadlines for Trustees:
- Initial Deadline: Submit the BO Register to the Master of the High Court by 15 November 2024 .
- Grace Period: A grace period until 30 November 2024 is provided for those experiencing technical issues with the online portal.
What Trustees Need to Do
To comply, trustees must:
- Maintain a Beneficial Ownership Register: This register should document details of beneficial owners, including founders, trustees, and named beneficiaries.
- Submit Records to the Master: Records must be submitted online, reflecting any updates.
- Maintain an Accountable Institution Register (AI Register): This second register should record details about the accountable institutions trustees engage with.
- Identify Dormant Trusts: Dormant trusts are exempt but require a formal status confirmation with the Master by answering a questionnaire available on the portal.
- Document ID Information: Certified copies of ID documents for all beneficial owners and institutional representatives must also be retained.
Trustees awaiting the formal termination of a trust must treat it as dormant and adhere to the steps above. Regular maintenance and real-time updating are essential for ongoing compliance.
Consequences of Non-Compliance
Failure to meet these requirements could result in substantial penalties, including:
- Fines: Up to R10 million .
- Imprisonment: Up to five years
- or both .
Non-compliance impacts South Africa’s standing with the Financial Action Task Force (FATF) and may hinder the country’s ability to exit the grey list by the January 2025 target.
Frequently Asked Questions
Does the BO Register requirement apply to all trusts? Yes, all South African trusts must comply, regardless of registration date or purpose.
Is the BO Register a one-time submission? No, trustees are obligated to maintain, update, and promptly report any changes.
Must trustees grant third-party access to the BO Register? Law enforcement can request access to the BO Register if approved by the Chief Master.
Is the AI Register submitted as well? The AI Register is maintained by trustees and does not require submission unless requested.
Regulatory Background
This amendment to the Trust Property Control Act aligns with international standards set by the FATF, aimed at anti-money laundering and counter-terrorism financing. The amendment was published in Government Gazette No. 48351 on 31 March 2023 and became effective on 1 April 2023.
Final Recommendations
Acting swiftly on these requirements is recommended. Trustees should assess their current status and ensure compliance with both BO and AI Register mandates. As compliance deadlines approach, proactive steps will help trustees avoid severe penalties while supporting South Africa’s efforts to strengthen regulatory transparency.
