New B-BBEE Regulations Demand Greater Transparency And Scrutiny

Over the past year, the broad-based black economic empowerment ("B-BBEE") landscape in South Africa has been completely overhauled and has become more stringent. Among the most significant changes are the:

• criminalisation of fronting practices
• establishment of the B-BBEE Commission
• promulgation of the new B-BBEE Regulations (the "Regulations"), which came into force on 6 June 2016

Criminalisation of fronting

A fronting practice is defined in the Broad-Based Black Economic Empowerment Act, 2003, as amended (the "B-BBEE Act"), as a transaction, arrangement or other act or conduct that directly or indirectly undermines or frustrates the achievement of the objectives of the B-BBEE Act and/or the Codes of Good Practice (the "Codes").