Trustees, trust administrators, and accountants brace yourselves - 7 June 2023

After the government promulgated onerous amendments to the Trust Property Control Act (TPCA) on 22 December 2022 (which were gazetted on 29 December 2022) and issued Regulations for its implementation on 31 March 2023, effective from 1 April 2023, the Department of Justice and Constitutional Development issued a media statement on 4 May 2023 reminding (informing) the public that these new measures have come into effect from 1 April 2023 with the heading “Increased measures for Trusts to combat money-laundering and terrorism financing crimes”. Although many believe that this is a government initiative, the media statement reminded all South Africans that South Africa is obliged, as a member of the Financial Action Task Force (FATF), to ensure that its regulatory environment is geared towards international standards in anti-money laundering and combating the financing of terrorism. The media statement reminds the public that a trustee convicted of any offence as a result of not acting in terms of the amended laws referred to below will be liable to a fine of up to R 10 million, or imprisonment for up to five years, or to both such fine and imprisonment. Before introducing these amendments, the TPCA had no prescribed penalties for non-compliance. At the same time, amendments to the Financial Intelligence Centre Act (the FIC Act) were promulgated, which impact all trust service providers providing these services as a “business”, whether you are an independent trustee, trust administrator, or accountant. Non-compliance with this Act can lead to hefty penalties, including a financial penalty of up to R 10 million for a natural person or up to R 50 million for a legal person, or imprisonment for a period not exceeding 15 years or a fine not exceeding R 100 million for more serious offences.