Will the blame game between trustees, accountants, and service providers start soon? - 15 November 2024

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South Africa was greylisted by the Financial Action Task Force (FATF) in February 2023 for failing to meet international standards on money laundering, terrorist financing, and proliferation financing. The FATF is an intergovernmental body that assesses countries’ ability to combat illicit financial activity. Remaining on the FATF’s greylist would negatively impact all South Africans, both reputationally and economically. Government is, therefore, making a concerted effort to exit the greylist in early 2025, two years after we have been greylisted. One of the outstanding action items that must be addressed for the last scheduled reporting cycle, concluding in February 2025, is timely access to beneficial ownership information concerning companies and trusts.

Master’s call to action to have South Africa removed from greylist - 30 October 2024

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When South Africa was greylisted by the Financial Action Task Force (FATF) in February 2023, many people believed that its damaging effect was already anticipated and largely priced in by the financial markets at that time and, therefore, did not present a significant further risk to the stability of the South African economy.

Role of ‘dormant’ and deregistered trusts in drive to be removed from greylist - 10 October 2024

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When South Africa was greylisted by the Financial Action Task Force (FATF) in February 2023, many people believed that its damaging effect was already anticipated and largely priced in by the financial markets at that time and, therefore, did not present a significant further risk to the stability of the South African economy.

Deadline for trustees to submit Beneficial Ownership information to the Master - 3 October 2024

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While attending an inter-regional peer exchange on Beneficial Ownership Transparency and the Role of Trusts, organised by Open Ownership (OO), the United Nations Office on Drugs and Crime (UNODC), the Stolen Asset Recovery Initiative (StAR), hosted by the Namibian Ministry of Justice, it became clear that many countries are scrambling to improve their transparency measures for trusts. The Financial Action Task Force (FATF) sets international standards through its Regulations, specifically Regulation 25 for trusts.

Trustees’ role in exiting the greylist - 12 September 2024

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South Africa was greylisted in 2023 by the global financial crime watchdog, the Financial Action Task Force (FATF), created under the Group of 7 countries (G7) to combat international money laundering and, after 2001, terrorist financing, for not complying with international standards. This increased reputational risk, limited inward foreign investment, and made it more difficult for South Africans to access foreign capital as foreign businesses and banks require more due diligence.

Foreign trust beneficiaries – beware of the tax considerations - 5 September 2024

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Over the years, several South African trust beneficiaries ceased to be South African tax residents, and others never were. Many South African families also created international structures as part of their estate plans. The South African Revenue Service (SARS) had to adapt its taxation laws to accommodate these changing circumstances to collect taxes efficiently.

The importance of valid trustee resolutions - 1 August 2024

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Many believe that the recent greylisting measures introduced compliance requirements for trusts for the first time. To quote an accountant who has served as independent trustee and accountant on hundreds of trusts for the past twenty years: “Luckily, in the past, we were not really required to do anything. It is only now that we have to start doing something. So I will start now, going forward.”

Should trustees consider voluntary disclosure of their non-compliance to SARS? - 11 July 2024

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In many instances, trustees abdicate their responsibilities to their accountants or tax practitioners, leaving them to manage the trusts’ tax affairs. A number of accountants/tax practitioners not specialising in trusts treat them similarly to legal entities such as companies, ignoring their unique tax rules. That may get their clients (and even themselves) in trouble.