SOUTH AFRICA Law and Practice Contributed by: Professor Michael Katz, Matthew Morrison and Madison Liebmann, ENS
tion Report, which placed the country on the list of states that failed to meet these standards, the General Law (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act, No 22 of 2022 (GLAA) was signed into law in December 2022. The GLAA amends various pieces of legislation, including the Companies Act and the Trust Property Control Act, No 57 of 1988 (TPCA), which has an impact on corporate governance. For instance, the GLAA has broadened the legislation set out in Section 69 (8)(b)(iv) of the Companies Act, which would disqualify a person from being a director, to include the Protection of Constitutional Democracy Against Terrorist and Related Activities Act, No 33 of 2004 and the Tax Administration Act, No 28 of 2011, in addition to the Companies Act; the Insolvency Act, No 24 of 1936; the Close Corporations Act, No 69 of 1984; the Competition Act, No 89 of 1998; the Financial Intelligence Centre Act, No 38 of 2001 (FICA); the Financial Markets Act, No 19 of 2012; and Chapter 2 of the Prevention and Combat - ing of Corrupt Activities Act, No 12 of 2004 if such person is convicted of an offence thereun - der. Furthermore, if such person is subject to a resolution adopted by the Security Council of the United Nations providing for financial sanctions, they would be disqualified from being a director of a company. The GLAA also introduced the concept of “ben- eficial owner” to the Companies Act (see 5.5Dis- closure by Shareholders in Publicly Traded Companies ). Regarding trusts, the GLAA intro - duced new offences, in the case of the TPCA, for trustees who fail to comply with the newly introduced provisions relating to the establish - ment, maintenance and submission of pre - scribed information relating to beneficial owners of trusts and accountable institutions used by
trustees, and for trustees who fail to make speci - fied disclosures to accountable institutions. A trustee who fails to comply with the above obli - gations will have committed an offence and on conviction can be liable to a fine not exceeding ZAR10 million, or imprisonment not exceeding five years, or both. According to a media statement published by the Department of National Treasury on 21 February 2025, South Africa is now deemed to have addressed or largely addressed 20 of the 22 action items in its Action Plan, leaving two items to be addressed in the next report - ing period, which runs from March 2025 to June 2025. Once the remaining action items have been addressed, this is likely to enable South Africa to exit the FATF Greylist in October 2025. It is also worth noting that the National Treasury published the draft General Laws (Anti-Money Laundering and Combating Terrorism Financ - ing) Amendment Bill, 2024 (the GLAA Bill) in December 2024, which aims to demonstrate South Africa’s commitment to strengthening its anti-money laundering and combatting the financing of terrorism system by addressing the deficiencies identified by the FATF in its Mutual Evaluation Report. In this regard, the GLAA Bill proposes amend - ments to various pieces of legislation, includ - ing the Companies Act, so as to empower the Companies and Intellectual Property Commis - sion (CIPC) to: • deregister a company that fails to submit a securities register within a certain period; and • impose administrative penalties.
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