Ultimate Beneficial Ownership Registers: Ensuring Transparency and Security

We understand that many of our members who use Treasury Trust Services may have experienced a tinge of panic upon receiving newsletters from various sources regarding the Ultimate Beneficial Ownership registers. These registers have become a hot topic following recent amendments to the Trust Property Control Act and South Africa’s greylisting position. But fear not, for we are here to ease your worries and shed more light on this important matter.

As some of you may recall, we touched on this subject in a previous article. However, we feel it is crucial to emphasise a few key points once again to provide you with peace of mind. By now, most of you know that the General Laws (Anti-Money Laundering and Combating Terrorism Financing), introduced amendments to various acts. These amendments were because South Africa was placed on the “greylist” which resulted in stringent regulations imposed by the Financial Action Task Force (FATF).

One of the noteworthy amendments mandates trustees to maintain information regarding beneficial owners. This entails keeping up-to-date records of the Trust’s beneficial ownership and submitting a register containing the prescribed information to the Master of the High Court. The Master, in turn, is responsible for maintaining a register that houses crucial details about the beneficial ownership of Trusts. To facilitate this process, the information must be entered into the Master’s online portal either by one of the trustees or through a Power of Attorney. At Treasury Trust Services, our selected Independent Trustees, have taken it upon themselves to handle the Ultimate Beneficial Ownership registers for clients and are currently in the process of submitting the necessary information to the Master of the High Court.

Now, let’s delve into what Ultimate Beneficial Ownership truly means.

Who needs to be registered on the UBO?

• The founders of the Trust, or, if the founder is a legal entity or acting on behalf of a partnership or another Trust, the ultimate natural person who directly or indirectly owns or exercises effective control over that legal entity or partnership.
• The trustees of the Trust, or if the trustee is a legal entity or person acting on behalf of a partnership, the ultimate natural person who directly or indirectly owns or exercises effective control over that legal entity or partnership.
• The named beneficiaries in the Trust, or if the beneficiary is a legal entity, a partnership, or someone acting on behalf of a partnership or pursuant to another Trust, the ultimate natural person who directly or indirectly owns or exercises effective control over that legal entity, partnership, or Trust.
• The natural person who directly or indirectly owns the relevant Trust property.
• The natural person who effectively controls the administration of Trust arrangements established in the trust deed.

Now, for those who have not yet supplied the required information, pay close attention to the details that must be included in these registers for each beneficial owner. Brace yourself for this list:

• The grounds on which the person is considered a beneficial owner of the trust (e.g., founder, trustee, beneficiary)
• Full names/Entity name
• Surname
• ID type
• ID number/Passport/Registration number
• Nationality
• Residential address
• Domicilium Address
• E-mail address
• Contact number
• Date on which the person became a beneficial owner of the trust
• Date on which the person ceased to be a beneficial owner of the trust (if applicable)

In the case of a minor being a beneficial owner, the Master’s online registers allow for the inclusion of the guardian’s details as well. Moreover, the Master of the High Court requests that trustees maintain certified copies of the IDs of all beneficial owners within their records.

There is another important update to note regarding resolutions for trust transactions. Section 11 of the Trust Property Control Act now requires trustees to provide details of all accountable institutions they utilise as agents to perform trustee functions and provide services. These details encompass:

1. The name and registration number of the accountable institution
2. The functions or services performed by the accountable institution for the trustees
3. The date on which the transaction is entered into

Therefore, we kindly request that you complete and sign all resolutions in full to align with the amended provisions.

To wrap it up, it is vital for trustees to comply with and maintain proper record-keeping practices pertaining to beneficial ownership. Failure to do so could lead to severe consequences, including fines of up to R10 Million or imprisonment for a maximum of five years upon conviction.

We strongly urge all Trust clients to take note of the email sent on 31 March 2023, which requested essential information to complete the Ultimate Beneficial Ownership registers. If you have not provided this information to your Independent Trustee, please prioritise doing so without delay. Hence, we implore trustees to actively participate in providing the necessary information. Should you have any further queries, please contact your Independent Trustee, who will ensure that your trust remains fully compliant with all relevant legislation.