The National Treasury wants to expand the powers of the Companies and Intellectual Property Commission (CIPC) to include deregistering companies that fail to submit a securities register within a certain period as part of wide-ranging efforts to clamp down on money-laundering and terrorism financing.
A commission securities register is a mandatory record listing all shares or ownership interests in a company, which must be filed annually to disclose beneficial ownership ― key for regulatory compliance and combating financial crime.
The Treasury, in a bill it intends putting forward, also wants to empower the commission to impose administrative penalties on companies falling behind on submitting their securities registers and require obligated entities to “report to the commission any material discrepancy in the information it holds in respect of beneficial owners”.
South Africa was in October removed from the greylist of countries that do not meet global standards for the combating of money-laundering and terrorism financing.
This after the Financial Action Task Force (FATF) determined the country had sharpened its tools against money-laundering and financing of terrorism.
FATF put South Africa on the dreaded greylist in 2023 after finding it had lax anti-money-laundering laws.
To keep FATF at bay, the government has been amending laws governing money flow transparency.
The Treasury also wants to amend the Financial Intelligence Centre (FIC) Act of 2001 and expand the sharing of information by the centre.
The mooted amendments also clothe the FIC with the power to conduct lifestyle audits, including the expansion of the financial watchdog to include the requesting of information from public entities and municipalities.
With government and entities procuring goods and services of about R1-trillion annually, errant business people and rogue government officials have often colluded to loot the state’s coffers in schemes often involving complex money-flow webs.
To enhance the ability of South African courts to issue orders for the freezing of property, funds or assets associated with terrorism or related activities, the National Treasury is proposing to expand the type of information of which accountable institutions and reporting institutions are required to advise the FIC.
“To require the person authorised by the minister to receive a report relating to the conveyance of cash to or from the Republic to send a copy of the report to the centre within a prescribed period; to provide for a magistrate or judge of an area of jurisdiction within which the accountable institution conducts business to hear applications by the centre in respect of monitoring orders,” the notice to introduce the General Laws (Anti-money-laundering and Combating Terrorism Financing) Amendment Bill in the National Assembly reads.
“To expand the circumstance under which the protection of persons making reports apply; to require accountable institutions to take into account the risk of new delivery mechanisms and the use of new or developing technologies, which may involve or facilitate money laundering activities, the financing of terrorist and related activities, or proliferation financing activities.”
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