The Master of the High Court is currently calling on trusts to provide beneficial ownership information in order to ensure compliance with Section 22 of the Trust Administration Act 11 of 2023.
The Trust Administration Act 11 of 2023 regulates the administration of trust moneys in Namibia and came into operation on 3 August 2023. This Act replaced the Trust Monies Protection Act 34 of 1934.
A trust is a structure to which property is transferred by the founder or third party to beneficiaries nominated in a trust deed. The trust property is administered by trustees appointed in the trust deed or will for the benefit of one or more beneficiaries. Trusts are mostly used for the purposes of estate planning, business activities and charity.
This week, Simon Idipo, the Chief Public Relations Officer at the Ministry of Justice talks to Observer Money about the current call for trusts provide beneficial ownership information in order to ensure compliance with Section 22 of the Trust Administration Act 11.
Observer Money (OM): How many trusts are registered in Namibia as of now?
Simon Idipo (SI): Currently we have 10 716 trusts registered in Namibia.
OM: What is the total worth of the trusts registered with the Master of the High Court?
SI: There is no way in which the Master of the High Court can know the worth of trusts as these assets are managed outside our office and assets are put or registered with these trusts after the Master of the High Court has issued them with a Trust Certificate. The majority of them start with a donation of N$ 100 each but this varies from founder to founder.
OM: What is the importance of the collection of beneficial ownership on all trusts?
SI: The importance of the collection of beneficial ownership information is to ensure compliance with Section 22 of the Trust Administration Act 11 of 2023. This concept comes from the Financial Action Task Force (FATF) 40 recommendations in its Methodology of 2013 and in particular Recommendation 25 dealing with Trusts which are known as Legal Arrangements. There is an obligation on countries to obtain and hold adequate, accurate and current information of the founder, the trustee, the protector (if any), the beneficiaries of class of beneficiaries and any other natural person exercising ultimate effective control over the trust.
OM: How many beneficiaries are registered under the trusts registered with the Master of the High Court?
SI: A trust is a legal arrangement created by the founder for the benefit of someone else called the beneficiary. Thus you cannot create a trust without beneficiaries, it will be invalid. Again the number of beneficiaries varies from trust to trust and the Master of the High Court is not in a position to determine the number of beneficiaries of trusts registered with our offices as these are managed outside our office.
OM: What will happen to those trusts that miss the deadline?
SI: In terms of Section 22 (4) the deadline for submission of BO information is within 90 days of the Act coming into force. The Act came into force on 3 August 2023 and the 90 days’ period expires on the 11th of December 2023. With the expiry of this 90 days, the Master of the High Court will start to issue Administrative Sanctions in terms of Section 47 of the Trust Administration Act 11 of 2023.
OM: How many trusts and administrators have responded to the call for beneficial ownership information and in terms of percentages, how much is this?
SI: Out of the 10 716 trusts registered with the MOHC, we found that 5004 of these trusts are active and the rest are dormant hence the call on 3 November 2023 to voluntarily deregister dormant or inactive trust. Thus, out of the 5004 active trusts we received over a 956 beneficial ownership information that gives us a percentage of 19.10 percent.
OM: Anything else that you may wish to add?
SI: New trusts are not registered without the submission of beneficial information. We wish to reiterate the collection of beneficial information is a continuous project and thus trustees, trust practitioners and trust administrators are herewith called upon to submit the information prior to the 11 of December 2023 to avoid sanctions being imposed which may include a financial penalty not exceeding N$10 million.