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ARTICLE · 06 FEBRUARY 2015

Broad-Based Black Economic Empowerment: Fronting - Circular 3

Cox Yeats
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The Broad-Based Black Economic Empowerment Act 53 of 2003 (2003 Act) together with the generic codes of good practice and the sector codes, provide the legislative framework for Broad-Based Black Economic Empowerment (BEE) in South Africa.

South AfricaCorporate/Commercial Law
Michael Jackson
Michael Jackson
Keren Watson
Keren Watson
Simon Watson
Simon Watson
Jason Goodison
Jason Goodison
Jenna Padoa
Jenna Padoa

The Broad-Based Black Economic Empowerment Act 53 of 2003 (2003 Act) together with the generic codes of good practice and the sector codes, provide the legislative framework for Broad-Based Black Economic Empowerment (BEE) in South Africa.

The Broad-Based Black Economic Empowerment Amendment Act, 46 of 2013 (the Amendment Act) which brings about significant changes to BEE, came into effect on 24 October 2014.

The Amendment Act introduces a number of far-reaching changes to the 2003 Act.

This circular highlights the key changes introduced by the Amendment Act with a specific focus on the criminalisation of fronting practices.

BACKGROUND TO THE AMENDMENT ACT

Since the proclamation of the 2003 Act, many enterprises have resorted to dishonest measures (including fronting practices) in order to boost their BEE score.

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