On 19 February 2024, the Companies and Intellectual Property Commission (CICP) sent out a notice regarding the rollout of the CIPC Beneficial Ownership Reviewer system, which allows the examination, review and sample of Beneficial Ownership filings, allowing the CIPC to assist and advise corporate users on the completeness and accuracy of filings.
Background
Among other pieces of legislation, the Companies Act, 71 of 2008, was amended in response to the recommendations made by the Financial Action Task Force (FATF) regarding beneficial ownership transparency in South Africa. These changes were made through the General Laws (anti-Money Laundering and Combatting Terrorism Financing) Amendment Act, 22 of 2022.
In line with these changes, the CIPC was mandated to establish a register of Beneficial Owners for all entity types registered in terms of the Companies Act and the Close Corporations Act. This means that the CIPC now has a mandate to request companies to file and update beneficial owner information. On 1 April 2023, the CIPC launched the Beneficial Ownership Register, enabling all business vehicles that are registered with the CIPC to submit their declarations of Beneficial Ownership. Existing entities (incorporated before 24 May 2023) must file their beneficial ownership information in line with the Annual Returns anniversary date. New entities (incorporated after 24 May 2023) must file their beneficial ownership information within 10 days after such incorporation.
All entities are required to submit accurate, complete, and verified beneficial ownership information, as providing false and inaccurate beneficial ownership information is regarded as an offence. Failure to comply will result in enforcement actions with appropriate sanctions.
The amendment to the Regulations and establishment of the Beneficial Ownership register is another step in addressing the deficiencies identified by the FATF and are aimed towards removing South Africa from the FATF greylist.
What’s new?
In respect of the review process, the concept of allowing for re-filing of incorrect or incomplete submissions provides an opportunity to correct any mistakes and ensure compliance with the legislation. Beneficial ownership filings rejected or queried may be re-filed. Filers will be notified via e-mail of any need for re-filing, once the applications have been examined.