According to the Financial Intelligence Centre (FIC), improvements to the country’s beneficial ownership system would increase corporate transparency, making them less appealing to criminals.
During a partnership session with the UN’s Southern Africa Office of Drugs and Crime, FIC Director Xolisile Khanyile talked on tools and procedures to acquire beneficial ownership data during investigations into suspected company activity.
The FIC currently intends to reform the framework via which trusts, corporations, and partnerships may be scrutinised in terms of who is participating in such corporate vehicles or has an interest in the aforementioned firm, for example.
“Access by authorised recipients to beneficial ownership information would significantly aid efforts to protect and safeguard the financial system from illicit use,” Khanyile said.
He stated that understanding the legal and beneficial ownership of company vehicles can help competent authorities, especially law enforcement and the FIC.
Anyone participating in illegal activities at arm’s length through corporations or trusts might be identified by examining beneficial ownership.
A beneficial ownership framework is a set of rules, policies, and processes that are used to determine who the genuine owners of a business or asset are. Companies are required to provide information about their beneficial owners under these rules.
Beneficial owners are individuals or groups who have ultimate control or ownership of a financial institution, regardless of whether their name is the name under which the firm is registered.
According to Khanyile, putting South Africa’s investigative capabilities regarding beneficial ownership in line with international norms would make it more difficult for illegal actors to utilise legal businesses to conceal gains from criminal conduct.
According to the FIC, the Financial Action Task Force (FATF) has updated its requirements on beneficial ownership of legal persons to better prevention and deterrence of legal person concerns.
As a result, law enforcement authorities worldwide must guarantee that they have all of the essential authority to get beneficial ownership information from corporations.
The FATF is an international watchdog that has greylisted South Africa for lax money laundering and other financial crime legislation.
The FATF examined South Africa’s beneficial ownership framework, which was deemed to lack timely access to accurate and appropriate beneficial ownership information, according to the FIC.
The newly approved General Laws (Anti-Money Laundering and Combating Terrorist Financing) Amendment Act (General Laws Amendment Act), according to the FIC, has brought many modifications to the beneficial ownership system.
Definitions of a beneficial owner have now been included to various functional items of law through modification to bring the idea of beneficial ownership up to international standards.
The Companies and Intellectual Property Commission, which oversees over 2.1 million firms, stated this month that it intends to create a record of beneficial owners.
