B-BBEE Commission releases practical guide to ensure validity of B-BBEE certificates

The B-BBEE Commission has issued a number of letters requiring organisations to withdraw their B-BBEE Verification Certificates due to invalidity or fraudulent conduct. The purpose of the Practice Guide 1 of 2018, issued on 3 September 2018, is to set out the approach the B-BBEE Commission is likely to take on determining the validity of B-BBEE certificates.
 
A B-BBEE Verification Certificate, a sworn affidavit and a B-BBEE certificate issued by the Companies and Intellectual Property Commission (CIPC) is evidence of a company’s compliance with the B-BBEE Act. It is illegal for a company to trade with an invalid or incorrect B-BBEE certificate.

Validity of a sworn affidavit

Exempted Micro-Enterprises (EMEs) and black controlled and owned Qualifying Small Enterprises (QSEs) only have to use a sworn affidavit to indicate their B-BBEE compliance status.

The Department of Trade and Industry (dti) has designed mandatory affidavit templates which can be accessed on the dti website. The following pointers are key in determining the validity of a sworn affidavit:

1. Name/s as they appear in the identity document and the identity number.
2. Designation of the deponent as either the director, owner or member must be indicated in order to know that that person is duly authorised to depose of an affidavit.
3. Name of company as per registration documents issued by the CIPC.
4. Percentage of black ownership, black female ownership and designated groups. In the case of specialised enterprises as per Statement 004, the percentage of black beneficiaries must be reflected.
5. Total revenue for the year based on audited financial statements or management accounts.
6. Financial year-end documents, which were used to determine the total revenue.
7. B-BBEE status level.
8. Empowering supplier status must be indicated. For QSEs, the deponent must select the basis for the empowering supplier status.
9. Date deponent signed and date of Commissioner of Oaths must be the same.
10. Commissioner of Oaths cannot be an employee or ex officio of the company.

Validity of B-BBEE certificates issued by CIPC

The dti mandated CIPC to issue B-BBEE certificates for EMEs and start-up enterprises and B-BBEE certificates can be applied for via e-services on the CIPC website. A valid CIPC certificate must have the following information:

1. Name of enterprise, registration number and business address.
2. Date of issue and expiry must be indicated.
3. Percentage of total black ownership, black female ownership and total white ownership.
4. Certificate number.
5. Barcode with tracking number.
6. Barcode with enterprise number.
7. B-BBEE status and procurement recognition level.
8. The dti logo on the top left corner and CIPC logo on the top right corner.
9. CIPC watermark.

Determining validity of a B-BBEE certificate for B-BBEE compliance

A company that qualifies to undergo a B-BBEE verification process, can only do so with a verification professional accredited by SANAS. A B-BBEE Verification Certificate shall identify the following information:

1. Name of company as per registration documents issued by CIPC.
2. Value-Add Tax number.
3. The B-BBEE scorecard against which the certificate is issued, indicating all elements and scores achieved for each element. The actual score achieved must be linked to the total points as per the relevant Codes.
4.  B-BBEE status with corresponding procurement recognition level.
5. The relevant Codes used to issue the B-BBEE Verification Certificate.
6. Date of issue and expiry
7. Financial period which was used to issue the B-BBEE Verification Certificate.
8. Unique identification number of the B-BBEE verification professional.
9. Name and logo/mark of the B-BBEE verification professional or agency.
10. A B-BBEE Verification Certificate must be signed by the technical signatory at the bottom with full name and surname. The details of the technical signatory can be checked on the SANAS website.
11. The SANAS logo on the B-BBEE Verification Certificate.

Penalties

Trading with an invalid or fraudulent B-BBEE Verification Certificate is an offence which could lead to fines of up to 10% of a company’s annual turnover. Individuals involved could be imprisoned for up to 10 years.