FIC: Beneficial Ownership obligations for business

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FIC: Beneficial Ownership obligations for business

• 23 March 2026
• Miscellaneous
• South African Accounting Academy

Summary:

The Financial Intelligence Centre (FIC) has published an insightful article regarding Beneficial Ownership, and the specific obligations for businesses as set out in the Financial Intelligence Centre Act 38 of 2001 (FICA).

 

Article:

Corporate structures are often abused to hide the proceeds of crime, which places the onus on the business community in South Africa to understand and meet their beneficial ownership obligations. In other words, when establishing a business relationship with – or conducting a single transaction for – a client who is a legal person, trust or partnership, it is essential to determine the identity of the warm body (that is the natural person), who holds controlling ownership in the company, trust or other corporate vehicle involved.

In its 2019 mutual evaluation report of South Africa, the Financial Action Task Force (FATF) – the watchdog that leads international action to combat money laundering and terrorist and proliferation financing – highlighted the need for enhanced beneficial ownership controls to be implemented by the country’s accountable institutions.

These controls assist law enforcement and other competent authorities to identify the persons who ultimately own, control and benefit from a company, trust or other corporate vehicle. FATF recommendations 24 and 25 detail the international standard regarding legal persons and arrangements in respect of beneficial ownership. 

As such, South Africa has introduced reforms on beneficial ownership transparency to bring the country in line with global standards for combating money laundering and countering terrorist and proliferation financing.

Among these is the requirement for accountable institutions listed under Schedule 1 of the Financial Intelligence Centre Act (FIC Act) to establish the identity of the beneficial owners of those companies, trusts or other corporate vehicles that are its clients, and take reasonable steps to verify the identity of the beneficial owners.

All accountable institutions must comply with the beneficial ownership obligations set out in section 21B of the FIC Act and explained in greater detail in public compliance communication 59. Refer to our previous Alert dated 14 August 2024

The article discusses the following:

• Nature of business, ownership and control structure
• Beneficial owners are natural persons
• Process of elimination to identify beneficial owners for clients who are legal persons (3 steps)
• Evidence that the process of elimination was followed
• Identifying beneficial owners of trusts
• Identifying beneficial owners of partnerships
• Risk management and compliance programme

Click here to access the article:

https://www.fic.gov.za/2026/03/09/beneficial-ownership-obligations/ 

Relevance to Auditors, Independent Reviewers & Accountants:

• Auditors, Independent Reviewers and Accountants should be aware of the latest publications and guidance issued by regulators, such as the FIC – to enable their assessment of accountable institutions’ compliance with FICA.
• As a TCSP (which is an accountable institution), the firm also needs to comply with FIC, and the resulting Beneficial Ownership requirements.
• When advising clients or performing this function on their behalf, practitioners should be aware of the finer details and specific guidance on Beneficial Ownership.

Relevance to Your clients:

• Relevant companies and CCs (accountable institutions) should be aware of the latest publications and guidance issued by regulators, such as the FIC.

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