To address the beneficial-ownership information deficiencies identified by the Financial Action Task Force in its Mutual Evaluation Report adopted in 2021, the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act, 2022 ("Amendment Act") was signed into law by the president on the 29 December 2022. The Amendment Act amends five statutes, including the Non-Profit Organisation Act, 1997("NPO Act").
The Amendment Act has changed the objectives of the NPO Act, requiring all NPOs to comply with an administrative and regulatory framework that must be established in terms of the NPO Act. Registered NPOs will have to maintain adequate standards of governance, transparency and accountability.
When the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Bill was originally opened for public comments on 27 September 2022, a key concern among civil society organisations was the proposed universal mandatory registration of all NPOs operating in South Africa with the Department of Social Development's NPO Directorate.
This concern has been addressed by confining the mandatory registration to organisations that make donations to individuals or organisations outside South Africa or if they provide humanitarian, charitable, educational or cultural services outside the country ("cross-border NPOs"). NPOs that are not organs of state may apply for registration. Cross-border NPOs must apply to the Director of NPOs for registration by the requirements and procedure contemplated in the NPO Act.
All registered NPOs, including cross-border NPOs, must provide the prescribed information in writing about the office-bearers, control structure, governance, management, administration and operations of the relevant NPO. The Director must in turn keep a register of such information.
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