The Department of Justice and Constitutional Development has introduced statutory updates regarding trusts in South Africa.
The changes aim to prevent trusts being used for illicit financial flows, tax evasion or money laundering.
The move also aligns the country with international standards set by the Financial Action Task Force (FATF).
The regulation of trusts bill compels trustees to now prepare annual financial statements and keep records for five years after they stop being trustees, to avert money laundering and other criminal activities.
Chief Director of Legislative Development at the in Department, Advocate Tsietsi Sebelemetja says the bill is open for public comment until 11 of September.
“We get into negative rating by FATF as you would know we are also dealing with the issues that those who are beneficiaries are well known and safe guarded. Let’s take an example of two kinds of trusts established under this law. You can have communal property or those that are given land back, instead of using the rightful legislation that is under land reform, the CPA. They then come to this trust which is not a proper vehicle to do that. Secondly, those that are getting into accidents or maybe legal and medical issues and are awarded some benefits in terms of the damages then the lawyers open trusts under this act but there tends to be some abuse of the funds.”
Source link
