This blog was co-authored with Michael McCarthy, Candidate Attorney
In response to the now-implemented threat of greylisting, South Africa enacted the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act, 2022. The following amendments to the Trust Property Control Act, 1998 became operational with effect from 1 April 2023. Every trustee needs to understand and comply with any new obligations.
Under section 11A, trustees must keep an up-to-date, available, record of prescribed beneficial ownership information of the trust and must lodge that information with the Master’s Office. The exact information required from trustees, to whom and in what circumstances the Master or trustees must make such information available, and the form and content of each register, is outlined in amendments to the Regulations which also became effective on 1 April 2023.
A beneficial owner includes each founder of the trust, each trustee of the trust, and each beneficiary referred to by name in the trust instrument. If the beneficial owner is a legal person, information must be recorded of any natural person who directly or indirectly ultimately owns or exercises effective control of the legal person. A beneficial owner includes any natural person who directly or indirectly ultimately owns the relevant trust property, or who exercises effective control over the administration of the trust arrangements.
In terms of the Regulations, trustees must record the following information of each beneficial owner:
- Full names, date of birth, nationality, citizenship, official identity document number or passport number, indicating the type of document and the country of issue;
- Residential address and, if different from residential address, the beneficial owner’s address for service of notices, or other means of contact;
- If the person is a registered taxpayer in the Republic, the person’s tax number;
- The class or category of beneficial ownership, and the date on which the person became a beneficial owner;
- The date on which a person ceases to be a beneficial owner.
Trustees must keep a certified or verified copy of each beneficial owner’s identity document or passport consistent with the information provided.
Under section 11(e), if trustees use an external accountable institution such as a legal practitioner or certain financial services providers (the full list of accountable institutions is set out in schedule 1 to the Financial Intelligence Centre Act, 2001) as an agent to perform their trustee functions regarding trust property, and obtains services from the accountable institution for the performance of trustee functions regarding trust property, trustees must record:
- The name of the accountable institution, registration details, if a legal person or the official identity document number or passport number, if a natural person, indicating the type of document and the country of issue.
- If the trustee used or uses any other accountable institution as an agent to perform the trustee’s functions, the nature of the functions.
- The nature of services provided by an accountable institution.
- If the trustee enters into a single such transaction (a transaction not in the course of a business relationship and with a value below the prescribed threshold under FICA), with the accountable institution, the date on which the single transaction was entered into and the nature of the single transaction.
- If the trustee enters into a business relationship (where transactions are concluded on a regular basis in terms of an arrangement with such an accountable institution), the date on which and the nature of the business relationship was entered into.
Importantly, section 7 (replacement to section 19 of the TCPA) makes a failure to comply with 10(2), 11(1)(e) or 11A(1) an offence, the conviction of which may result in a fine, imprisonment, or both.
Under section 6(1H), the Master must now maintain a public register of persons disqualified from serving as trustees. The register must be available to the public electronically and at the Master’s Office during office hours. Trustees and the Master must, if requested, make the information contained in their beneficial ownership registers available to various bodies listed in the Regulations, such as the National Prosecuting Authority, and SARS.