The Financial Intelligence Centre (FIC) will soon require companies such as banks, estate agents, law firms and investment firms to play open cards about their geographic information to allow the agency to better assess risks related to money-laundering and terrorism financing. The move is meant to lift the lid on complex corporate structures, layered by shell companies and offshore entities that can be used by rogue players to hide beneficial ownership, making it difficult to trace illicit funds. Under the FIC’s draft directive, companies with more than one geographic location will need to provide the FIC with information regarding the full particulars of their head office, including registration number, address and particulars of a contact person at the office.
The same applies to branches if companies have more than one satellite. If a company has one or more branches outside South Africa, it must provide the full particulars of each branch and the persons responsible for the branches. The same would apply if companies have one or more subsidiaries outside the country.
The FATF recommended that South Africa develop policies that allow for better alignment of anti-financial-crime measures with data protection and privacy rules. The FIC’s financial intelligence products assist law enforcement and other authorities in their investigations, prosecutions and applications for asset forfeiture. According to the FIC’s 2025 annual report, the outfit contributed to the recovery of almost R144m in criminal proceeds in 2024/25 flowing from the 3,104 reactive and 1,092 proactive financial intelligence reports it produced, as well as 51 reports on illicit financial flows.
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A Moody’s Shell Company Indicator has flagged more than 61,000 entities globally with circular ownership patterns, highlighting the scale of the challenge and the potential for misuse in financial crime, sanctions evasion and money-laundering. According to Moody’s, circular ownership is a network of ownership relationships in which entities indirectly own or control each other in a loop. While not illegal, these structures can be used to exploit regulatory loopholes and conceal the identity of the beneficial owner.
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