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					The Role of Black Economic Empowerment (BEE) Verification
Agencies in the National Liquor Authority Registration
Process
Information Circular No. 3, Quarter 3, 2008


Purpose
The purpose of this circular is to inform applicants and registrants of the
National Liquor Authority (NLA) of the existence of BEE Verification Agencies
(VAs), to define their role/function in the assessment of companies’
compliance with BEE requirements, to specify how these agencies can be of
assistance to NLA applicants and registrants, and how they can be contacted.


Background
The primary objective of the Liquor Act, No. 59 of 2003, is to promote the
development of a responsible and sustainable liquor industry in a manner that
facilitates the entry of new participants into the industry and promotes
diversity of ownership in the industry. The Liquor Act is aligned to the B-BBEE
Act, the latter of which aims to:


      Promote economic transformation in order to enable the meaningful
       participation of black people in the economy;
      Achieve a substantial change in the racial composition of ownership
       and management structures,
      Achieve a substantial change in the skilled occupation of existing and
       new enterprises;
      Increase the extent to which black women own and manage existing
       and new enterprises; and
      Increase black people’s access to economic activities, infrastructure
       and skills training.




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As a registration requirement, applicants are expected to make commitments
in respect of some or all elements of BEE,1depending on the size and nature
of the company/institution. Furthermore, applicants are required to provide the
NLA with B-BBEE status certificates from accredited BEE VAs and VAs that
are in possession of valid South African National Accreditation System
(SANAS) pre-assessment letters. These certificates are valid for 12 months
from the date of issue.
Applicants are entitled to approach any BEE VA that is accredited and any
VA that are in possession of pre-assessment letters from SANAS. The pre-
assessment letters from SANAS provide assurance that the prospective VA
has met certain criteria set out by SANAS and is in the process of obtaining
accreditation.


 However, it has come to our attention that most NLA applicants and
registrants are unaware of who these VAs are, how they can be of assistance
to them, and how they can be contacted, hence the need for this
communication.


What are verification agencies?
BEE VAs are companies accredited by SANAS, on behalf of the dti, to
conduct formal assessments of companies in respect of their BEE status and
to verify their compliance with the Broad-Based Black Economic
Empowerment Act (B-BBEE) Act. This is done by examining compliance with
the seven elements of the B-BBEE Codes of Good Practice.


The Role of Verification Agencies


The role of BEE VAs is to:


       Assess, verify and validate B-BBEE information;
       Verify both disclosed and undisclosed B-BBEE-related information;
       Verify information based on the principles contained in B-BBEE Codes
        of Good Practice;
       Issue verification certificates and reports, which are valid for twelve
        (12) months; and

1
  The seven elements of BEE include Ownership; Management Control; Employment Equity;
Skills Development; Preferential Procurement; Enterprise Development; and Socio-Economic
Development. Detailed information on BEE, including these elements, is available under
‘BEE’ on the dti website.



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      Evaluate B-BBEE transactions.


BEE Commitment Requirements

Applicants are required to indicate their commitment to BEE in respect of the
B-BBEE Codes of Good Practice:

Micro-Enterprises
These are applicants/registrants with an annual turnover/projected annual
turnover of R5m and below. These applicants/registrants are exempted from
adhering to B-BBEE criteria and are thus required to provide the NLA with an
exemption certificate, to be obtained from:

      A BEE VA;
      A recognised auditor; or
      An accounting officer.

Qualifying Small Enterprises
These are applicants with a turnover of between R5m and R35m. Qualifying
small enterprises are required to select any four (4) of the seven (7) BEE
elements, and should provide the NLA with BEE plans and compliance
certificates from any accredited BEE VAs or any VA in possession of a valid
SANAS pre-assessment letter.

Other Companies
These are applicants with an annual turnover that exceeds R35m. Such
applicants are required to comply with all seven (7) elements of BEE and
provide the NLA with BEE plans, together with compliance certificates from
any accredited BEE VAs or any VA in possession of a valid SANAS pre-
assessment letter.


For more information on BEE Accreditation Verification Agencies, visit the dti
website: www.thedti.gov.za (BEE) or telephone the dti Customer Contact
Centre: 0861 843 384. Alternatively, visit the SANAS website: www.sanas.co.za




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