Entities that refuse to accept sworn affidavits as B-BBEE certificates are breaking the law

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The Broad Based Black Economic Empowerment Commission (B-BBEE) has issued stern warning against corporate entities and organs of state that refuse to accept sworn affidavits as a form of B-BBEE certificate for small enterprises, branding this act as an offence in law.

In a statement released this week, the B-BBEE Commission said “An entity or organ of state that refuses to accept a sworn affidavit from entities that qualify must be reported to us immediately as that undermines the objectives of the B-BBEE Act.”

Sworn affidavits pass as B-BBEE certificates for Exempted Micro-Enterprises (EMEs) which are entities with R10 million or less in annual turnover and Qualifying Small Enterprises (QSEs), entities with annual turnover between R10 million and R50 million that are at least 51% black owned.

This is a critical intervention as verification agencies prey on the ignorance of small enterprises by making them opt for verified B-BBEE certificates at great cost when this is not necessary. And some corporate entities and organs of state are known to push small enterprises to acquire verified B-BBEE certificate as a condition of doing business with them. The Commission brands this practice as illegal.

The Commission added that government introduced the sworn affidavit option to reduce the cost of doing business and regulatory burden for small enterprises. This option can be accessed at no cost on the website of the department of trade and industry (www.thedti.gov.za) and from CIPC’s website at www.cipc.co.za.

The B-BBEE Commission said the only time an EME can be verified by a SANAS accredited verification professional is when it wishes to maximise its B-BBEE points and move to a higher B-BBEE recognition level. And that must be done using the QSE Scorecard.

But there is an exception to this rule. The exception applies to the transport sector where EMEs have a choice of obtaining accounting letters or get verified and issued a B-BBEE certificate by accredited agencies. This exception is created by the fact that the Transport Sector Code has not been aligned to the amended generic Codes.

Another exception applies where start-ups that are EMEs wish to tender for contracts valued at R10 million or above. These must be verified using the QSE scorecard. Where tenders are valued above R50 million and above, EME’s must be verified using the generic scorecard.

The B-BBEE Commission also advised entities to reject B-BBEE certificates that have been issued by verification agencies or professionals who are not accredited by South African National Accreditation Systems (SANAS). Such B-BBEE certificates, said the Commission, are invalid. A list of SANAS Accredited agencies is available on the SANAS website www.sanas.co.za.

The Commission further noted that it initiates investigations against verification agencies and professionals that consistently issue B-BBEE certificates incorrectly, as well as those that defied the instruction to withdraw a B-BBEE certificate considered to be invalid.

The Commission advised that a list of invalid certificates can be viewed here   https://bbbeecommission.co.za/invalid-b-bbee-certificates/

info@probonomatters.co.za

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