SOUTH AFRICA: PROPOSED COMPANIES ACT AMENDMENT OF ‘BENEFICIAL INTEREST’ DISCLOSURE REQUIREMENTS

The Standing Committee on Finance has invited comments on the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill (Bill).

The purpose of the amendments is to give effect to recommendations contained in South Africa’s Mutual Evaluation Report of the FAFT which required urgent legislative amendments to prevent greylisting.

Among other changes proposed, the Bill proposes two to the Companies Act relating to enhanced beneficial disclosure requirements and additional disqualification criteria for directors and prescribed officers.

The proposed amendments will scrap the 2021 Companies Amendment Bill introduction of the concept of a ‘true owner’ and rather introduce the defined term for ‘beneficial owner’. The definition cross references to the FICA definition and also includes a natural person who directly or indirectly ultimately owns or controls a company through equity, voting rights, director appointments, or influence; or ownership or control of a direct or indirect controlling holding company, another juristic person, a body of persons (corporate or unincorporate), partnership or as specified in regulations.

Beneficial owner disclosures will be required in share registers and to the Commission, in a form and frequency to be prescribed. Disclosure registers and share registers will also need to be filed with annual returns, which filings will be made available electronically to any person as prescribed.

All prescribed requirements (form and period, etc.) will be determined after consultation with the Minister of Finance and the Financial Intelligence Centre.

In terms of new grounds for disqualification as a director, these include for any conviction linked to money laundering, terrorist financing, or proliferation financing activities; or under the Protection of Constitutional Democracy Against Terrorism and Related Activities Act, 2004, or the Tax Administration Act, 2011.