South Africa Extends Deadline for Trustees to Register Beneficial Ownership, Aimed at Improving Compliance

In a recent move to enhance compliance with international financial regulations, the South African Department of Justice and Constitutional Development has announced a crucial 15-day extension for trustees to register their details on the Beneficial Ownership Register. Initially set for the 15th of November 2024, the new deadline is now the 30th of November 2024, after which no further extensions will be granted.

This decision comes as part of the enforcement of the amendments to the Trust Property Control Act, 1988, which took effect on April 1, 2023. The amendments aim to address transparency issues in beneficial ownership within South Africa's regulatory system. As a member of the Financial Action Task Force (FATF), South Africa is committed to aligning its regulatory framework with international standards to combat anti-money laundering and the financing of terrorism.

Under the amended act, trustees are required to disclose their involvement with accountable institutions and ensure that all transactions or business relationships involving trust property are transparent and recorded. Additionally, trustees must establish, maintain, and lodge records of beneficial ownership information with the Master of the High Court as stipulated in regulations 3B and 3C of the Act. Failure to comply with these regulations constitutes an offence with significant penalties.

Observations indicate a worrying level of non-compliance among trustees, particularly concerning the lodging of beneficial ownership information. This trend could jeopardize South Africa's efforts to be removed from the FATF's "grey list" by the January 2025 deadline. Such a status could have severe economic repercussions, including increased scrutiny from international financial institutions and potential effects on foreign investment.

The Minister of Justice and Constitutional Development has laid down specific regulations, published in Government Gazette No. 48351 on March 31, 2023, to streamline the implementation of these amendments. Prior to these changes, the Trust Property Control Act did not mandate reporting on beneficial ownership, nor did it impose penalties for non-compliance.

The Justice Department urges all trustees to adhere to the new regulations promptly. For detailed guidelines and to comply with the filing requirements, trustees can visit the official Department website or directly access the necessary forms and instructions through the provided link: https://www.justice.gov.za/master/trust.html.