Johan van der Walt provides an update on the Special Voluntary Disclosure Programme in respect of non-compliant South African Exchange Control residents with undisclosed assets abroad.
South Africa’s Special Voluntary Disclosure Programme (SVDP), now well underway, gives another opportunity for non-compliant South African Exchange Control (Excon) residents with undisclosed assets abroad to regularise those offshore assets.
The SVDP Excon allows South African individuals, sole proprietorships, partnerships, deceased estates, insolvent estates, South African trusts, close corporations and companies and former Excon residents to disclose their foreign assets held in contravention of the Excon Regulations 1961. Any party involved in an Excon matter currently under investigation by the Financial Surveillance Department (FinSurv) of the South African Reserve Bank (SARB) cannot apply for Excon relief under the SVDP.
According to the Circular 06/2016, FinSurv may grant SVDP Excon relief (so-called 'administrative relief') on the following basis:
The Circular also provides for the unwinding of so-called “loop structures” i.e. where foreign assets had been re-invested ('looped” back') into South Africa. This area is complex and the SARB has provided detailed guidance in this regard.
Certain Excon transgressions could be regularised through 'administrative relief outside of the SVDP'. In such cases the disclosure would be made to FinSurv via an Authorised Dealer in foreign exchange. Examples of this are:
Disclosures relating to the above will in most instances not attract any levy, but merely require a full declaration to an Authorised Dealer.
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