Women’s Month is an opportunity to celebrate the resilience and achievements of women. It is also a time to reflect on the barriers that continue to undermine their independence and financial security.

Domestic violence remains a devastating reality in South Africa. However, abuse is not always physical. One of the least recognised and very damaging forms of domestic violence is economic abuse which occurs when an abuser controls another person’s access to money, employment, assets or credit, creating financial dependence and limiting their ability to leave the abusive relationship. While it often goes unnoticed, its effects can be long lasting, trapping victims in cycles of abuse and control.

Financial independence is often a key to escaping an abusive relationship. However, many women often unknowingly sign legal agreements that expose them to debt, financial liability or the loss of valuable rights. While these agreements are not inherently harmful, signing them without fully understanding their legal consequences can result in devastating financial implications.

Here are five agreements every woman should understand before putting pen to paper.

Suretyship

A suretyship agreement is a legally binding contract in which a person agrees to be responsible for another person’s debt if that person fails to pay.

Standing surety for a spouse, partner, child or family member is often done out of love, loyalty or trust. However, if the borrower fails to make payment, the creditor may recover the debt from the surety. It is not a defence that the relationship has ended or that you never benefited from the loan.

Before signing a suretyship agreement, ask yourself one important question: If this person never pays another cent, can I afford to repay the debt myself? If the answer is no, think carefully before signing.

Credit agreements

Credit agreements include personal loans, vehicle finance, credit cards and store accounts. These agreements are primarily regulated by the National Credit Act 34 of 2005 (“NCA”), which provides important protections for consumers.

Credit can be a useful financial tool when used responsibly. However, you should avoid taking credit or obtaining finance for another person. If that person fails to repay the debt, you remain legally responsible for the repayments, regardless of any private arrangement between the parties.

Before signing a credit agreement, ensure that you understand the total cost of the credit, including interest and fees, the repayment period and the consequences of default. A poor credit record can affect your ability to obtain future credit, purchase a home, finance a vehicle, rent property and, in some instances, even secure employment. If you become over-indebted, seek assistance early, as the NCA provides mechanisms such as debt counselling to assist qualifying consumers.

Marriage

Marriage is one of the most significant legal and financial commitments a woman will ever make, yet many enter into marriage without fully understanding its legal consequences.

A common misconception is that the payment of lobola determines whether a couple is legally married or what matrimonial property system applies. It does not.

Unless an antenuptial contract (“ANC”) is concluded before the marriage, a civil marriage and, in most instances, a monogamous customary marriage will be in community of property. This means that the spouses generally share one joint estate, including both assets and liabilities. An ANC allows couples to marry out of community of property, with or without the accrual system.

It is also a misconception that there is no valid customary marriage because only part of the lobola was paid or because there was no “white wedding”. If the legal requirements for a valid customary marriage—namely: the prospective spouses must both be above the age of 18 years, must both consent to be married to each other under customary law, and the marriage must be negotiated and entered into or celebrated in accordance with customary law—have been met, a legally recognised marriage may exist. Obtaining legal advice before marriage is not planning for divorce; it is protecting your financial future.

 Property purchase agreements

Buying property is a huge financial commitment, and understanding the legal implications of the agreement before signing is essential to protecting your investment. Encouragingly, according to recent property market data, women now outnumber men as sole residential property owners in South Africa, reflecting the significant strides women are making towards financial independence. As more women invest in property, it is important to understand the legal requirements that govern the purchase and transfer of ownership.

In terms of the Alienation of Land Act 68 of 1981, the sale of immovable property must generally be in writing and signed by the parties. However, signing the agreement does not automatically make you the owner. Ownership of immovable property passes only once the transfer is registered in the Deeds Office.

Before signing any property sale agreement, it is imperative to confirm that the seller has the legal right to sell the property, understand when transfer will take place and familiarise yourself with the costs involved, including transfer duty (where applicable), conveyancing fees and bond registration costs. A little caution and obtaining legal advice before signing can prevent costly disputes later.

Settlement agreements

A settlement agreement is a legally binding contract in which parties to a dispute agree to resolve a dispute by setting out the terms on which the matter will be settled, often without the need for further litigation or a trial. Settlement agreements are commonly concluded in divorce proceedings, employment disputes and civil matters.

When emotions are high, there is often a temptation to sign simply to bring the matter to an end. However, given the legally binding nature of settlement agreements, you may waive important legal rights or compromise claims you may otherwise have had.

Before signing, you must ensure that you understand exactly what you are agreeing to, whether the settlement is fair and what the long-term legal and financial consequences may be. If you are uncertain, it is important to obtain legal advice before signing.

Final thoughts

Knowledge is one of the most powerful forms of protection. Before signing any contract, take the time to read it carefully, ask questions and seek legal advice where necessary. The best time to protect your financial future is before you put pen to paper. Women’s financial empowerment is not only about earning an income; it is also about understanding the legal agreements that can protect, or undermine, that independence.

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Employers undertaking restructuring exercises are frequently faced with a practical dilemma: where the new organisational structure contains fewer or different positions, how should they determine which employees are placed into those positions without turning the placement exercise itself into an unfair selection process?

The Labour Court’s recent judgment in SASBO – The Finance Union on behalf of Members v Access Bank (SA) Ltd; Kau & others v Access Bank (SA) Ltd provides useful guidance – and some welcome reassurance for employers.  Access Bank embarked on a large-scale restructuring process which affected approximately 150 employees. As part of the restructuring, employees were required to interview for positions in the new organisational structure. The interviews took place while the section 189A consultation process was still underway, and this became one of the employees’ principal complaints.  The employees argued that the Bank’s approach to selection was flawed. Among other things, they contended that the criteria were applied inconsistently, that the Bank had departed from Last-In, First-Out (LIFO) and had relied on subjective performance assessments. They also objected to interviews being conducted while consultations were ongoing.

The Bank, however, drew an important distinction between selecting employees for retrenchment and attempting to place employees into positions in the restructured business.

Its proposed selection criteria included skills, qualifications, experience and business-critical competencies, with LIFO applying where candidates were equally suitable. Importantly, the Bank maintained that the interviews were not being used to identify employees for dismissal. Rather, they formed part of its efforts to avoid or mitigate retrenchments by redeploying employees and placing them into available positions.  That distinction found favour with the Court. The Court confirmed that sections 189 and 189A require an employer to be transparent and responsive during consultation. They do not, however, require the employer to secure agreement on selection criteria. The fact that employees or their representatives disagree with the employer’s proposed criteria does not mean that consultation has failed. Indeed, the Court expressly confirmed that the rejection of counter-proposals does not, without more, amount to a failure to consult.  This is an important point for employers. Consultation is a consensus-seeking exercise, not a consensus-requiring exercise.

Perhaps more significantly, the Court accepted that requiring employees to compete for positions through an interview process can be fair where the purpose of that process is to avoid retrenchment, rather than to determine who should be retrenched.  Where agreement cannot be reached, an employer may ultimately implement fair and objective selection criteria after properly considering the alternatives proposed during consultation. In this case, the combination of skills, qualifications, experience, business-critical requirements and LIFO where employees were equally suitable was not found to demonstrate a failure to consult in good faith.

There is, however, an important caution.  The Court acknowledged that conducting interviews while consultation was still underway could reasonably create the impression that the outcome had already been determined and could undermine confidence in the consultation process. Nevertheless, even if the timing of the interviews was procedurally irregular, that did not render the consultation process fundamentally defective. The critical consideration was the purpose of the interviews: on the Bank’s version, they were directed at redeployment and placement, rather than identifying employees for retrenchment.  The judgment therefore provides employers with a useful roadmap when restructuring. There is nothing inherently unfair about asking employees to compete for positions in a new structure. Employers should, however, maintain a clear distinction between the criteria used to select employees for retrenchment and an assessment or interview process used to determine whether employees can be placed or redeployed into available positions.  That distinction should not exist only on paper. The purpose of the interviews, the positions available and the criteria against which employees are assessed should be clearly communicated during consultation. Employers should also genuinely consult on proposed retrenchment selection criteria, consider counter-proposals and be able to explain why those proposals were rejected.

Ultimately, Access Bank is a welcome reminder that the LRA does not require an employer restructuring its business to abandon legitimate considerations of skills, qualifications, experience and business-critical requirements, nor does it necessarily prevent employees from being interviewed for positions in a new structure.   The key is knowing what the interview is for. An interview designed to select who leaves may form part of the retrenchment selection criteria. An interview designed to find a place for an employee in the restructured business may instead be part of the employer’s attempt to prevent that retrenchment altogether.

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Reinstatement has long been recognised as the primary remedy for substantively unfair dismissal under the Labour Relations Act. Yet employers frequently raise the same practical objection when faced with an order restoring an employee to work: what happens if the employee’s job no longer exists?

The recent Labour Appeal Court judgment in Bakhresa SA (Pty) Ltd v Jaipal provides an important reminder that the disappearance of a position is not necessarily the end of the reinstatement enquiry. More significantly, it confirms that reinstatement and retrenchment are not mutually exclusive concepts. An employer may still embark on a genuine operational requirements process after reinstatement – but it cannot use redundancy as a shortcut to avoid reinstatement altogether.

The employee was dismissed following allegations that she had accused her employer of fraud in relation to Labour Court proceedings and had used inappropriate language towards management during an unprotected strike. The CCMA found the dismissal substantively unfair and ordered her reinstatement with retrospective effect. Both the Labour Court and, ultimately, the Labour Appeal Court upheld that decision.

The employer’s principal argument on appeal centred not on the fairness of the dismissal, but on remedy. It contended that reinstatement was no longer reasonably practicable because the employee’s position as Procurement Supervisor had become redundant after her dismissal. Her procurement responsibilities had been distributed among other employees and, according to the employer, there was simply no job to return to. That argument failed. The Court drew an important distinction between the disappearance of a position and the disappearance of the work. While the title of Procurement Supervisor may have fallen away, the procurement function plainly continued. The employer remained a large food manufacturing business that still required procurement services. The work had merely been spread across existing employees. That did not establish that reinstatement had become impossible or even impracticable.

More importantly, the Court emphasised that section 193(2)(c) of the LRA requires compelling evidence that reinstatement is not reasonably practicable. Bare assertions from management will not suffice. Employers seeking to rely on redundancy must demonstrate genuine operational circumstances making reinstatement futile or impossible. Unsupported claims that a position has been abolished will rarely meet that threshold. Perhaps the most commercially significant aspect of the judgment, however, lies elsewhere.

The Court expressly recognised that reinstatement does not prevent an employer from subsequently initiating a fair retrenchment process if operational requirements genuinely justify it. Once the employment contract has been revived, the employer remains entitled to consult under section 189 regarding any legitimate redundancy. What it cannot do is rely on its own unilateral decision to abolish a position during the employee’s absence as a reason to deny reinstatement in the first place. That distinction is critical. Reinstatement restores the employment relationship; it does not guarantee lifetime employment or freeze an employer’s operational structure. Businesses remain entitled to restructure where commercial realities demand it. Equally, employees whose dismissals have been found to be unfair remain subject to the same operational processes that would apply to any other employee.

The Court went even further by clarifying what reinstatement actually means. It is not necessarily a return to the identical job title previously occupied. Rather, reinstatement revives the employment contract on terms and conditions no less favourable than those that existed before dismissal. Positions evolve, reporting lines change and organisational structures shift. The law protects the contractual relationship – not necessarily the label attached to the role.

For employers, the practical lesson is an important one. If an unfair dismissal is challenged, replacing the employee, redistributing their duties or redesigning the organisational chart should never be viewed as an insurance policy against reinstatement. Courts are unlikely to permit employers to defeat the LRA’s primary remedy through changes that they themselves implemented after the dismissal. If genuine operational requirements arise, the appropriate course is to comply with the reinstatement order and then follow a procedurally and substantively fair consultation process under section 189.

The Labour Appeal Court’s judgment strikes a sensible balance. It preserves reinstatement as the primary remedy for unfair dismissal while recognising that legitimate business restructuring remains possible. Employers are not trapped by reinstatement orders – but nor can they use redundancy as a convenient escape route. In employment law, process still matters, and operational fairness cannot be achieved by bypassing the very protections the LRA was designed to provide.

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South African labour law has long recognised that a dismissal can fail for one of two reasons. The employer may not have had a fair reason to dismiss the employee, or it may have followed an unfair procedure. While both render a dismissal unfair, they are distinct enquiries with distinct remedies.

A recent Labour Appeal Court judgment in Universal Product Network (Pty) Ltd v Commissioner Mbatsana NO and Others provides an important reminder that those two concepts should never be conflated.

The dispute arose from a protected strike at Universal Product Network (UPN), Woolworths’ logistics arm, during 2015. Following widespread misconduct during the strike, approximately 256 employees faced disciplinary action for breaching picketing rules, violating a court interdict and obstructing access to the employer’s premises. After numerous disciplinary enquiries, almost all were dismissed.

The CCMA commissioner concluded that the dismissals were substantively fair. The employees had been properly identified, had breached the picketing rules and the employer had a valid reason for dismissal. However, the disciplinary process itself was procedurally flawed, resulting in an award of one month’s remuneration to each employee as compensation.  That should, in many respects, have been the end of the matter.  Instead, the Labour Court took a different approach. It reasoned that the procedural defects were so severe that they effectively tainted the outcome of the disciplinary proceedings, converting what had been a substantively fair dismissal into one that was substantively unfair. The court ordered reinstatement.

The Labour Appeal Court emphatically disagreed.  Perhaps the most significant aspect of the judgment is not simply the outcome, but the principle it establishes. The LAC rejected the proposition that “gross procedural unfairness” can somehow mutate into substantive unfairness. The current Labour Relations Act deliberately separates these two enquiries. Section 188 requires employers to prove both a fair reason for dismissal and a fair procedure. Failing one requirement does not erase compliance with the other.

The court illustrated the point with a practical example. An employee dismissed for theft without being afforded a disciplinary hearing may have suffered a procedurally unfair dismissal. That does not mean the employer suddenly lacked a fair reason for dismissal. The misconduct remains the misconduct. The procedural defect does not rewrite the facts.

This may appear obvious, but it is an important clarification. Over the years, various judgments have referred to “gross procedural unfairness” in different contexts, particularly where arbitration proceedings themselves were fundamentally defective. The Labour Appeal Court drew an important distinction between procedural unfairness during an internal disciplinary process and a gross irregularity during arbitration that deprives parties of a fair hearing. The latter may justify setting aside an arbitration award. The former does not transform the underlying reason for dismissal into an unfair one.

Equally important was the court’s criticism of the Labour Court for deciding a case that had never been pleaded. The employees had challenged the substantive fairness of their dismissals on the basis that they were not guilty and that dismissal was an inappropriate sanction. They had not argued that procedural unfairness itself rendered the dismissals substantively unfair. A reviewing court cannot create an entirely new case for a litigant. Litigation remains governed by pleadings, and review proceedings remain confined to the grounds advanced by the parties.

For employers, the judgment should not be read as permission to relax procedural standards. Procedural fairness remains a statutory requirement, and employers who disregard it may still face compensation awards. A procedurally flawed dismissal is still unfair.

What the judgment does provide, however, is welcome certainty. Where an employer can establish a fair reason for dismissal, procedural defects—even serious ones—do not automatically erase the substantive justification for the decision. The appropriate remedy will generally be compensation for procedural unfairness rather than reinstatement.

The Labour Appeal Court has therefore reaffirmed a principle that lies at the heart of dismissal law: substance and procedure travel together, but they remain separate journeys. Employers ignore either at their peril, but neither should be mistaken for the other.

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The legal lifecycle begins long before a dispute reaches court, or a regulator commences an investigation. It starts when employees negotiate contracts, evaluate acquisitions, respond to regulators, investigate complaints, interpret legislation and make commercial decisions with legal consequences. Increasingly, employees turn to generative artificial intelligence (“AI”) before consulting legal advisers. They routinely ask AI to review contracts, interpret legal requirements, summarise documents and recommend courses of action. As a result, AI is becoming part of the organisation’s legal decision-making process. By the time a lawyer becomes involved, AI may already have influenced the commercial decisions taken, the information presented, and the organisation’s legal position itself.

Many organisations have developed AI governance frameworks addressing cybersecurity, privacy, intellectual property, acceptable use and regulatory compliance. However, comparatively little attention has been given to how employee use of AI can affect an organisation’s legal position. By the time a matter reaches the legal department, AI may have already influenced multiple stages of the legal lifecycle. Employees may have –

• asked AI whether contracts may be terminated, whether regulatory approval is required, whether a contractual provision is enforceable, whether an employee may be dismissed or how best to respond to a regulator;
• uploaded confidential contracts, board papers or correspondence to public AI platforms;
• asked AI to prepare a briefing for internal or external legal advisers;
• asked AI whether the organisation has a legal defence;
• generated summaries of evidence or lengthy document sets;
• prepared investigation reports using AI;
• drafted witness statements with AI assistance; or
• asked AI to recommend a litigation or regulatory strategy.

Each of these interactions has the potential to affect the organisation’s legal position in ways that may not become apparent until much later.

The risk is not simply that AI may produce inaccurate answers. Employees may unknowingly allow AI to influence how legal issues are framed, what information is presented to legal advisers, and which decisions are taken before legal advice is obtained.

This issue is no longer theoretical. Recent judicial decisions demonstrate that courts are applying long-established legal principles—confidentiality, legal professional privilege, evidential integrity and professional accountability—to the use of AI.

The question for boards, executives and General Counsel is no longer whether employees are using AI—in many organisations, everyday business practice has already answered that. The more important question is whether organisations are governing that use before it influences contracts, transactions, regulatory engagement, investigations and the legal advice upon which significant business decisions depend.

AI is increasingly influencing legal advice before legal advisers become involved

Generative AI is increasingly becoming the first point of reference when legal or regulatory questions arise—not simply a way to obtain information more quickly.

Historically, employees confronted with unfamiliar contractual provisions, regulatory obligations or employment issues would seek guidance from legal teams before taking significant decisions. Today, many employees first consult AI. This behavioural shift has important implications.

Legal advice is only as reliable as the factual information upon which it is based. If employees rely on AI to interpret contracts, summarise correspondence, identify legal issues or assess regulatory obligations before lawyers become involved, AI may shape not only the decisions taken, but also the information presented to legal advisers.

AI systems may simplify complex legal questions, present tentative propositions with unwarranted confidence, overlook jurisdiction-specific requirements or fail to appreciate commercial context. They may identify certain risks while overlooking others, prioritise commercially attractive options over legally prudent ones, or incorrectly assume that legal principles from one jurisdiction apply elsewhere.

This does not mean AI is unreliable. Sound legal advice depends not only on legal rules, but also on judgment, context, and an appreciation of the organisation’s commercial objectives and risk appetite.

The objective should not be to prohibit employee use of AI, which is embedded in everyday business practice. Rather, it is to identify matters where AI may appropriately support productivity, where legal review should remain mandatory, and where public AI platforms should not be used at all.

AI can unintentionally alter an organisation’s legal position

The legal implications extend beyond the quality of legal advice received. The way employees interact with AI may itself unintentionally alter the organisation’s legal position.

Consider a transaction team negotiating a high-value acquisition. An employee uploads a draft share purchase agreement into a publicly available AI platform and asks whether the indemnity provisions are market standard. A regulatory affairs manager uploads correspondence received from a sector regulator and asks AI to prepare a proposed response. An internal investigator uploads witness statements and requests AI to identify inconsistencies before interviews are conducted.

These scenarios illustrate two significant governance risks. First, confidential commercial information may be disclosed to third-party AI providers, and organisations may have limited visibility over how uploaded information is stored, processed or used. Second, the use of public AI platforms may affect claims of confidentiality or legal professional privilege.

In United States v Heppner, a US federal court held that communications with publicly available AI platforms are not protected by attorney-client privilege, even where used to prepare a defence strategy or legal arguments in anticipation of litigation. Similarly, in Secretary of State for the Home Department v Hamid, the English High Court held that uploading client letters and Home Office decision letters to an open-source AI tool places that information in the public domain.

These decisions illustrate a broader lesson: public AI platforms should not be regarded as confidential. Organisations should distinguish between enterprise AI environments with appropriate contractual safeguards and publicly available systems whose treatment of uploaded information may differ significantly.

The governance challenge is broader than preventing inaccurate outputs. It is ensuring that employee use of AI does not reshape the organisation’s legal position through disclosure of confidential information or erosion of privilege before legal oversight occurs.

Today’s AI interactions may become tomorrow’s legal record

Many employees regard AI interactions as informal working notes or preliminary research. However, in litigation, regulatory investigations, competition inquiries, tax audits or shareholder disputes, these interactions may form part of the organisation’s legal record.

Employees frequently ask AI to summarise witness interviews, prepare chronologies, analyse documentary evidence or draft investigation reports. Those outputs may create additional records capable of scrutiny in subsequent proceedings and may become embedded in board papers, regulatory submissions, internal memoranda or legal instructions. Organisations may ultimately be required to explain not only the decisions taken, but also the role AI played in reaching them.

Discovery obligations extend beyond final documents to drafts, communications and other electronically stored information. Organisations should proceed on the basis that prompts, uploaded documents and AI-generated outputs relating to significant matters may one day require disclosure.

Recent litigation illustrates that this is no longer merely theoretical. In Fortis Advisors LLC v Krafton Inc., AI communications became part of the evidence in the case. In Goodwin v Goodwin, the English High Court approached witness evidence with caution where draft witness statements had been uploaded to ChatGPT before being finalised. The case illustrates that AI-assisted drafting may affect the weight a court is prepared to attach to evidence where there are concerns that the statements no longer reflect the witness’s own words. In Conservation Law Found., Inc. v. Shell Oil Co (United States District Court, District of Connecticut Ruling of U.S. Magistrate Judge Thomas Farrish (May 2026), the court ordered the production of AI prompts used by an expert in preparing their report.

Regulators increasingly expect organisations to explain how significant decisions were reached, particularly where those decisions affect consumers, employees or regulated activities. If AI has materially influenced regulatory submissions, internal investigations or compliance assessments, organisations may be required to explain the role AI played.

AI governance should therefore extend beyond acceptable-use policies to encompass document retention, records management and investigation protocols. Organisations should preserve original source documents, avoid relying exclusively on AI-generated summaries in significant matters and ensure legal advisers have access to primary evidence. In an era where AI interactions may become part of the legal record, preserving the integrity of that record is as important as preserving the underlying documents.

The governance lessons emerging from recent cases

Recent judicial decisions do not suggest that organisations should avoid AI. Rather, they demonstrate that long-established legal principles continue to apply irrespective of the technology used.

Courts have reinforced that responsibility for the accuracy of legal work remains with the human user, not the technology. AI may assist decision-making, but it does not replace professional judgment or diminish human accountability. (See, for example, South African decision: Mavundla v MEC: Department of Co-operative Government and Traditional Affairs, KwaZulu-Natal and Others; US decision: Mata v Avianca Inc.; UK decision: R (Ayinde) v London Borough of Haringey; Al-Haroun v Qatar National Bank)

South Africa recently experienced these challenges. The withdrawal of the 2026 Draft National AI Policy following reports of alleged fictitious AI-generated references reminds us that AI-assisted work remains subject to human accountability, whether in the public or private sector.

Conclusion

AI can influence your organisation’s entire legal lifecycle—from negotiating contracts and pursuing acquisitions to responding to regulators, conducting investigations, managing compliance and resolving disputes.

Much discussion surrounding AI has focused on responsible use of AI by lawyers. That debate remains important, but overlooks an equally significant challenge: AI is influencing legal issues long before lawyers become involved. It may shape the information presented to legal advisers, alter an organisation’s legal position and create records subject to regulatory or judicial scrutiny.

Organisations should therefore move beyond generic AI governance and adopt a legal lifecycle governance approach that identifies where AI may appropriately support legal and commercial decision-making, where legal oversight should remain mandatory, and where public AI platforms should not be used.

The organisations that derive the greatest value from AI are unlikely to be those that adopt AI the fastest. They will be those that recognise AI is changing how legal risk emerges within organisations. Where legal risk may be influenced long before lawyers are consulted, effective AI governance is about governing the legal consequences of how the technology is used.

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The EU’s Carbon Border Adjustment Mechanism has shifted from paperwork to payment in 2026 and South African exporters of steel, aluminium, cement and iron are squarely exposed. CBAM certificates became payable from 1 January 2026, and steel, aluminium, cement and iron exporters to the EU face rising costs as certificate coverage climbs from 2.5% of embedded emissions in 2026 to 100% by 2034. South Africa’s rising domestic carbon tax is the main lever to offset the EU charge but only if emissions data is verified and reported.

What exactly is CBAM?

The EU’s Carbon Border Adjustment Mechanism, or CBAM, is best understood as a carbon tax charged at the EU’s border. It was formally established by Regulation (EU) 2023/956 of the European Parliament and of the Council of 10 May 2023. The EU already prices carbon for its own industry through the EU Emissions Trading System, established under Directive 2003/87/EC [1], and CBAM ensures that goods imported into the EU carry a comparable carbon cost, so foreign producers cannot undercut EU manufacturers simply by emitting more. [2]

CBAM is not a treaty that countries sign up to. It is EU law that applies automatically and unilaterally to anyone exporting covered goods into the EU market – there is no opt-in, and no country’s consent is required. [3] South Africa, alongside China, India and Brazil, has publicly criticised the mechanism as an unfair burden on developing economies and argued that it breaches World Trade Organization rules. [4] That political contest does not, however, pause the compliance clock facing exporters. [5]

How the mechanism works

CBAM currently applies to iron and steel, aluminium, cement, fertiliser, hydrogen and electricity. The EU importer of the goods must report the embedded carbon emissions in what it brings in and, from 2026, must purchase and surrender CBAM certificates to cover those emissions. [6] The obligation is phased in gradually – certificates need only cover 2.5% of embedded emissions in 2026, rising step by step to 100% by 2034. [7] Where the exporting country has already charged the producer a carbon price, that amount is deducted, so only the difference between what has already been paid and the EU-equivalent price falls due. [8]

The EU has also proposed extending CBAM to around 180 further product categories manufactured from steel or aluminium – including machinery, vehicle parts, white goods and construction and electrical equipment. [9] That would pull many South African manufacturers of finished and semi-finished goods into scope, not only producers of raw metal.

The compliance timeline to diarise

CBAM’s transitional phase ran from October 2023 to the end of 2025 under Commission Implementing Regulation (EU) 2023/1773 [10], during which importers only had to report emissions, with no payments due. [11] The definitive phase began on 1 January 2026 under Regulation (EU) 2023/956 – importers must now buy and surrender certificates, and the EU has replaced its earlier, more generous default emissions values with country-specific defaults that include an added mark-up. [12] This matters a great deal for South African exporters – the transitional phase’s flat default values happened to sit below actual South African carbon intensity, giving local exporters an inadvertent, temporary cushion that disappears with the 2026 shift. [13]

The next major milestone is 30 September 2027, the deadline for the first annual certificate surrender, backed by penalties of €100 per tonne of CO2 (indexed to inflation) for shortfalls [14]. From 2027, the European Commission will also begin publishing default carbon-price references for third-country carbon pricing regimes – the mechanism through which South Africa’s own carbon tax could, in principle, be formally recognised to reduce the net CBAM bill its exporters face. [15] Beyond steel and aluminium, CBAM’s scope may extend further still, with signals of coverage for plastics and chemicals by 2026, and potentially all EU ETS sectors by 2030. [16]

Why South Africa is particularly exposed

South Africa’s economy carries a disproportionate share of CBAM risk. Its high electricity generation intensity makes it one of the most carbon-intensive exporters globally, and it has been flagged as likely to see declines in value-added specifically because of its reliance on high-emitting exports. [17] Iron, steel, aluminium and cement exports to the EU – sectors that matter enormously to South African trade and employment – face real added costs unless emissions intensity comes down to meet EU benchmarks. [18] Comparative analyses place South Africa among the economies facing the steepest relative cost increases as CBAM’s definitive phase takes hold. [19]

What non-compliance actually costs

Direct legal liability under CBAM sits with the EU importer of record, not with the South African exporter. [20] EU importers who fail to report, or who report inaccurate data, face fines of €10 to €50 per tonne of CO2; failing to surrender certificates on time, or operating without authorised-declarant status, attracts a much steeper €100 per tonne penalty (indexed to inflation); and importers who exceed authorised thresholds without approval can face penalties of three to five times that rate. [21]

South African exporters do not face these fines directly – but the practical effect lands on them regardless. If a South African supplier cannot or will not provide verified emissions data, its EU customer either pays the (often higher) default emissions value or looks elsewhere. Non-cooperative or high-emitting producers therefore risk losing EU market access indirectly, through their customers’ cost calculations, without a single fine ever being issued against them. [22]

What a CBAM certificate actually costs

The certificate price tracks the EU’s own carbon market, calculated as the weighted average of EU ETS auction prices. The first published price, for the first quarter of 2026, was €75.36 per tonne of CO2 equivalent. [23] In 2026, only 2.5% of embedded emissions need be covered by certificates, so the real-world bill is import volume, multiplied by embedded emissions, multiplied by that 2.5% factor, multiplied by the certificate price. Actual charges vary hugely by country and product: one Q1 2026 analysis put default-value CBAM costs on steel at roughly €100.55 per tonne for Turkey, €254.13 for India, €148.03 for Algeria and €94.14 for Vietnam [24] – underscoring how much cheaper it is to supply verified, plant-level emissions data rather than rely on generic country averages. [25]

The single biggest lever available to South Africa is the carbon-price deduction described above. South Africa’s own carbon tax, levied under the Carbon Tax Act 15 of 2019, [26] rose from R236 to R308 per tonne with Phase Two from January 2026, and is legislated to climb to R462 per tonne by 2030 – a credible, rising domestic price is precisely what keeps revenue in South African hands rather than “leaking” to Brussels via certificate purchases. [27]

What exporters should be doing now

Government-to-government diplomacy over CBAM’s fairness – through the WTO, the G20, the BASIC bloc and the African Continental Free Trade Area [28] – is a long game, and coalition-building of this kind will not resolve matters in time to help exporters through the 2026 definitive phase. [29] For individual businesses, four practical steps matter most –

1. Measure and report now. Commission a thorough CBAM impact assessment and build a compliance roadmap, including the systems needed to meet mandatory emissions reporting obligations. [30]

1.1. Steel and iron producers should commission mill-level emissions data (rather than relying on the EU’s generic country default values) so EU customers can access the lower, verified emissions figure instead of the costlier default.

1.2. Aluminium smelters should document the electricity source and grid emission factor behind each tonne produced, since power-intensive smelting is the single largest driver of embedded carbon in this sector.

1.3. Cement producers should report the clinker-to-cement ratio and kiln fuel mix per shipment, as these are the two variables the EU’s methodology weighs most heavily in calculating embedded emissions.

2. Cut embedded carbon. Reducing the greenhouse gas footprint of exported products, and aligning measurement with international standards, is the main lever available to reduce future certificate costs. [31]

2.1. Steel producers should, where feasible, shift a greater share of output to scrap-based electric arc furnace production, which carries a materially lower carbon footprint than primary blast-furnace steel.

2.2. Aluminium smelters should negotiate renewable or low-carbon power purchase agreements to displace grid electricity, directly reducing the emissions intensity that drives most of the CBAM charge on aluminium.

2.3. Cement producers should increase the use of supplementary cementitious materials, such as fly ash or slag, to lower the clinker ratio and adopt alternative fuels in the kiln.

2.4. Iron producers should invest in furnace efficiency upgrades and process-gas capture to reduce the emissions embedded in each tonne of iron exported.

3. Track South Africa’s domestic carbon tax. A rising, credible local carbon price is what allows South African exporters to claim a deduction against the EU charge, rather than effectively paying twice over. Steel, aluminium, cement and iron producers should keep Carbon Tax Act payment records and allowance certificates audit-ready, so the carbon price already paid domestically can be evidenced and deducted from the EU certificate bill without dispute

4. Do not wait on diplomacy. The reporting and certificate deadlines apply regardless of whether South Africa’s advocacy efforts succeed. Exporters across all four sectors should consider direct data-sharing arrangements with EU importers (with the relevant data privacy provisions), rather than waiting for the 30 September 2027 certificate-surrender deadline to force the conversation.

The bottom line

CBAM has moved from a reporting exercise to a real financial cost, and 2026 is the year that shift becomes concrete for anyone exporting steel, aluminium, cement or iron products into the EU. South Africa’s government is right to keep fighting for a fairer, more differentiated approach, but for individual exporters the more urgent task is decarbonising production and getting emissions-reporting infrastructure in place before rising certificate obligations start eating into margins or compel EU importers to consider less expensive exporters. Businesses that get ahead of verification and start reducing embedded carbon now will be far better placed than those waiting for the politics to be resolved.

[1] Directive 2003/87/EC of the European Parliament and of the Council of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the EU, on the EU Emissions Trading System.

[2] CBAM operates as a carbon cost applied at the EU border, mirroring the carbon price EU industry already pays under the EU Emissions Trading System. See Regulation (EU) 2023/956 of the European Parliament and of the Council of 10 May 2023 establishing a carbon border adjustment mechanism, recital 4 and Article 1 and Directive 2003/87/EC establishing the EU Emissions Trading System.

[3] CBAM is unilateral EU law binding on EU importers; it does not require agreement or ratification by exporting countries. See Regulation (EU) 2023/956, Article 1(1).

[4] South Africa, China, India and Brazil have criticised CBAM as placing an unfair burden on developing countries and as inconsistent with WTO rules. See Joint Statements of the BASIC Ministerial Meetings on Climate Change (2023 – 2024); South African National Treasury, Budget Review 2023, Chapter 4 (Carbon Tax and Climate Change).

[5] Compliance obligations for EU importers, and their knock-on effect on exporters, apply irrespective of the outcome of diplomatic or multilateral advocacy. See Regulation (EU) 2023/956, Articles 2, 5 and 22.

[6] CBAM currently covers iron and steel, aluminium, cement, fertiliser, hydrogen and electricity; EU importers must report embedded emissions and, from 2026, surrender matching certificates. See Regulation (EU) 2023/956, Annex I

[7] The CBAM certificate obligation is phased in from 2.5% of embedded emissions in 2026 to 100% by 2034, alongside the parallel phase-out of free EU ETS allowances. See Regulation (EU) 2023/956, Article 31; Commission Implementing Regulation (EU) 2025/2083 (CBAM Simplification Regulation).

[8] Where an exporting country has already charged the producer a carbon price, that amount is deducted from the CBAM certificate obligation otherwise due. See Regulation (EU) 2023/956, Article 9.

[9] The European Commission has proposed extending CBAM to approximately 180 downstream product categories reliant on steel or aluminium. See European Commission, Proposal for a Regulation amending Regulation (EU) 2023/956 as regards the simplification and scope extension of the carbon border adjustment mechanism, COM (2025) (December 2025).

[10] Commission Implementing Regulation (EU) 2023/1773 of 17 August 2023 laying down the rules for application of Regulation (EU) 2023/956 as regards reporting obligations for the purposes of the carbon border adjustment mechanism during the transitional period.

[11] CBAM’s transitional phase ran from 1 October 2023 to 31 December 2025, and was limited to quarterly emissions reporting with no certificate purchase obligation. See Commission Implementing Regulation (EU) 2023/1773 of 17 August 2023 laying down the rules for the transitional period.

[12] The definitive phase began on 1 January 2026, introducing country-specific default emissions values with an added mark-up in place of the earlier flat defaults. See Regulation (EU) 2023/956, Article 7(1) and Annex IV.

[13] During the transitional phase, EU default emissions values were lower than actual South African production intensity, providing a temporary and inadvertent cost advantage that ends with the 2026 definitive phase. See Commission Implementing Regulation (EU) 2023/1773, Annex III (default values for the transitional period).

[14] The first annual certificate surrender is due by 30 September 2027, with penalties of €100 per tonne of CO2 (indexed) for shortfalls. See Regulation (EU) 2023/956, Articles 22 and 26; Commission Implementing Regulation (EU) 2025/2083, Article 20.

[15] From 2027, the European Commission will publish default carbon-price references for third-country carbon pricing regimes, for use in the certificate deduction calculation. See Regulation (EU) 2023/956, Article 9(2).

[16] Signals point to potential CBAM expansion to plastics and chemicals by 2026, and to all EU ETS sectors by 2030. See Regulation (EU) 2023/956, Article 30 (review clause); European Parliament

[17] South Africa’s high electricity generation intensity is cited as a principal driver of its status as one of the most carbon-intensive exporting economies globally. See South African Department of Mineral Resources and Energy, Integrated Resource Plan; South African National Treasury, Budget Review 2023, Chapter 4.

[18] Iron, steel, aluminium and cement are identified as the South African export sectors most exposed to added CBAM-related costs. See South African National Treasury, Budget Review 2023 and 2025, Chapter 4 (Carbon Tax and Climate Change).

[19] Comparative cost analyses of CBAM’s definitive phase place South Africa among the more significantly affected exporting economies. See South African National Treasury, Budget Review 2025, Chapter 4 (Carbon Tax and Climate Change).

[20] CBAM imposes direct legal obligations on the EU importer of record, not on the non-EU exporter or producer. See Regulation (EU) 2023/956, Article 3(15) (definition of “authorised CBAM declarant”) and Article 4.

[21] EU importer penalties range from €10–€50 per tonne of CO2 for reporting failures, to €100 per tonne (indexed) for certificate shortfalls, rising to three-to-five times that rate for unauthorised imports above threshold. See Regulation (EU) 2023/956, Article 26; Commission Implementing Regulation (EU) 2023/1773, Article 16 (transitional reporting penalties).

[22] Non-EU producers unable to supply verified emissions data risk indirect loss of EU market access through their customers’ increased costs, notwithstanding the absence of direct penalties on the producer itself. See Regulation (EU) 2023/956, Article 7 (application of default values absent verified actual emissions data).

[23] The Q1 2026 CBAM certificate price, calculated as the weighted average EU ETS auction price, was published at €75.36 per tonne of CO2 equivalent. See Regulation (EU) 2023/956, Article 21; European Commission, published CBAM certificate price notices.

[24] Comparative analysis of Q1 2026 default-value CBAM costs on steel by country of origin, derived from published EU default emissions values and the Q1 2026 CBAM certificate price.

[25] Comparative Q1 2026 analyses show default-value CBAM costs on steel varying significantly by exporting country, illustrating the cost benefit of verified plant-level emissions data over generic country defaults. See European Commission, CBAM default value publications for Q1 2026, issued pursuant to Regulation (EU) 2023/956, Article 7.

[26] Carbon Tax Act 15 of 2019 (South Africa), as amended, including the Phase Two rate increase effective 1 January 2026.

[27] South Africa’s carbon tax rose to R308 per tonne from January 2026 (Phase Two) and is legislated to reach R462 per tonne by 2030. See Carbon Tax Act 15 of 2019, section 5, as amended; South African National Treasury, Budget Review 2025 and Draft Rate Amendment schedules.

[28] South Africa continues to engage on CBAM through the World Trade Organization, the G20, the BASIC bloc (Brazil, South Africa, India and China) and the African Continental Free Trade Area.

[29] South Africa has pursued coalition diplomacy on CBAM through the BASIC bloc, the G20 and the African Continental Free Trade Area Council of Ministers. See Joint Statements of the BASIC Ministerial Meetings on Climate Change (2023–2024); G20 communiqués under South Africa’s 2025 Presidency; AfCFTA Council of Ministers decisions.

[30] Exporters are advised to undertake CBAM impact assessments and establish compliance roadmaps ahead of the definitive phase. See Regulation (EU) 2023/956, Articles 4 – 8 (reporting and declarant obligations).

[31] Reducing embedded carbon in production, aligned with international measurement standards, is identified as the principal lever for minimising future CBAM certificate costs. See Regulation (EU) 2023/956, recital 4 (objective of incentivising cleaner production methods); ISO 14064 series on greenhouse gas quantification and verification

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Introduction

The general anti-avoidance rule – or the GAAR as it is “fondly” referred to in the tax world – has had a lot of media attention in the past short while. The GAAR has been the feature of tax legislation for many decades, though it has gone through various iterations. The latest version, which came into force in 2006, was designed to counter a number of principles that had been handed down by the courts that allowed taxpayers to escape the grasp of that legislation.

Interestingly it has taken some twenty years before some substantive and detailed decisions have been handed down by the courts on the “new” version.

Of late, there have been three important decisions:

• First, there was the decision of the SCA in the Erasmus case where the taxpayer was successful, and so I understand it, the Constitutional Court declined to hear the appeal. Although that related to the situation where SARS had invoked the GAAR, essentially the dispute was more procedural than substantive.
• The second recent decision was that the ABSA case where the Constitutional Court handed down a far ranging decision that actually went beyond the dispute that it was adjudicating. In the course of the judgment they have, in certain respects, effectively overturned 100 years of jurisprudence in South Africa, including decisions that were strongly influenced by a decision of the House of Lords where Lord Denning handed down the judgment. As many might know, Lord Denning was one of the most revered judges in Britain’s judicial history.
• The latest case is a decision of the Cape Tax Court in a case where six appeals, ie relating to six appellants, were heard concurrently (and, if it does not go on appeal, will likely be cited as company AF Proprietary Limited & Others v C:SARS). In this case the Tax Court dealt with each and every aspect of the GAAR and found against the taxpayer in regard to all of the aspects.

The GAAR

It is not my intention in this article to give an exposition of the GAAR or an analysis of any of the abovementioned court decisions. Rather my focus here is to place the GAAR in its proper context in the Income Tax Act, 1962 (the Act) and, indeed, where other fiscal legislation also has a GAAR of their own, an example being the VAT Act (though it is not as wide-ranging as the GAAR in the Act).

Essentially, for the GAAR to apply, four criteria must be met as follows:

• There must be a “transaction, operation, scheme, agreement or understanding (whether enforceable or not)” – now referred to as an “arrangement”.
• The arrangement must lead to an avoidance, deferral or reduction of tax – now referred to as a “tax benefit”.
• The sole or main purpose of the arrangement must be to obtain the tax benefit.
• Finally, the arrangement must include at least one of various so-called tainting elements, a very common one being that it was undertaken in an abnormal way or created rights and obligations that would not normally be created between persons dealing at arm’s length.

It is only when all four tests have been met that the GAAR can be invoked by SARS. Unlike in most aspects of the Act, SARS has the burden of proof as to whether there is an arrangement, that there is a tax benefit and that at least one tainting element is present. Having discharged its burden that there is a tax benefit there is a rebuttable presumption that the arrangement was entered into solely or mainly to obtain the tax benefit, and it is here where the onus lies on the taxpayer to prove otherwise.

The GAAR in context

The GAAR is designed to upset tax avoidance schemes that the Act does not otherwise deal with in its other provisions. As is evident from the four requirements above there is no specific rule in the Act that the taxpayer might have infringed. It is set out in broad and general terms to create a set of guidelines, so to speak, and if one falls within those guidelines the GAAR becomes applicable. What is very important to note is that the GAAR, by its nature, is only invoked by SARS when there is no other provision in the Act that SARS can rely on to tax the taxpayer. If the arrangement involves receiving amounts that were not taxable, there would be no specific provision in the Act to prevent this or unwind it; or there would be no specific anti-avoidance measure to counter its practice (and the Act is replete with these specific anti-avoidance measures). Put differently, the GAAR is only resorted to if the taxpayer and its arrangements are fully compliant with the provisions of the Act and the various interpretations in respect thereof. There would be nothing in the taxpayer’s actions or in the taxpayer’s income tax returns that SARS could point to and say “this is wrong and you have underpaid tax for the following reason”. And, interestingly, this is why historically SARS could never impose penalties when the GAAR was invoked, because there was absolutely nothing wrong with the tax return filed (this changed some years ago when the penalty provisions in the Tax Administration Act, 2011 were specifically amended to make a 75% penalty compulsory when the GAAR was successfully invoked, though a number of commentators believe that it can still be challenged).

And what is important to note is that the GAAR does not apply automatically – it has to be specifically invoked by SARS. So it is not a case, as with specific anti-avoidance rules, where a taxpayer can try and undertake a transaction but the Act sets out in words of one syllable that this will not work. If the taxpayer ignores the anti-avoidance provision and prepares its return on that basis, then the return is wrong and SARS can tax the taxpayer and impose penalties in the normal course.

Not so with the GAAR.  Before that can happen a number of steps have to be taken. Shortly stated these include –

• initially identifying the possibility of an impermissible avoidance arrangement;
• seeking documentation and explanations from the taxpayer;
• then sending to SARS a specific notice in terms of section 80J of the Act (not surprisingly, colloquially referred to as a section 80J notice) stating that they believe that the GAAR can apply and setting out SARS’s reasons therefor. The taxpayer is then given the opportunity to submit reasons to SARS why the GAAR should not apply.
• Only thereafter is SARS permitted to invoke the GAAR and raise the relevant assessment.

It is therefore evident that there is nothing inherently unlawful where a taxpayer undertakes an arrangement that has the effect of reducing an income tax liability. And nothing will happen in relation to that taxpayer unless and until SARS invokes the GAAR. Until then the taxpayer’s affairs can rightfully be said to be in apple pie order.

A balancing strategy

When a taxpayer seeks to do something that is clearly not permitted in the Act, we as advisors are very quick to explain this to a client and tell the client why it cannot be successfully done. Oftentimes, of course, there might be a different way to achieve the same end result without breaching the provisions of the Act, and that is where we get to deliver good news to the client instead of bad.

And if we have told the client that the proposal is wrong and the client goes ahead and does it anyway, then clearly that client is taking a risk, because if SARS does attack it there is very little that the client can say to defend itself.

Not so with the GAAR. In the case where the GAAR is a possibility we obviously bring that risk to the client’s attention, and then it is up to the client to decide whether or not to take the risk. And if the client wishes us to give an opinion in the proposed transaction or structure it would be remiss of us not also to include an analysis of the GAAR provisions in relation to the facts. But what is different there from the previous circumstance is that the client is secure in the knowledge that he or she is not breaking the law when undertaking the relevant arrangement. As I said, completing a return on this basis means that the return is 100% correct and the client’s affairs remain in apple pie order. It is only when SARS takes the necessary steps to invoke the GAAR that the picture changes.

And truth be told, invoking the GAAR and seeing it through until the end is very resource-intensive for both SARS and the taxpayer, and generally history has shown that the outcomes of a GAAR dispute when adjudicated by the courts are far murkier when assessing the prospects of success, compared to other types of tax disputes.

It follows, therefore, that per force, SARS has to pick and choose very carefully which cases it wishes to tax based on the GAAR. It is not as simple and straightforward as, for example, taking the view that a particular item of expenditure does not meet the tests for deductibility, and then let the dispute runs its course. It is very much more than that. And this inevitably means that the risks of being attacked under the GAAR are, from a purely practical point of view, much smaller than in relation to being attacked under any other provisions of the Act. And in this regard it is not dissimilar from transfer pricing disputes, which are also resource-intensive. There is simply a limit to how many of these SARS (or any tax authority anywhere in the world) can take on at any point in time, so that it is necessary to choose the ones they are most likely to win, and where the amounts of tax make the effort worthwhile.

This, of course, does not mean that taxpayers should be reckless or cavalier in their approach. Thee consequence of the GAAR being invoked means that the taxpayer is in for a very uncomfortable ride. But taxpayers, especially in business, are by nature risk-takers as opposed to risk-avoiders. It then becomes an ordinary business risk to decide whether or not to go ahead and face the possibility of being attacked under the GAAR, but at the same time knowing full well that no unlawful steps have been taken in the interim.

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SARS is generally prohibited from challenging income tax assessments that are over three years old, unless it can prove that the taxpayer was not correctly assessed as a result of fraud, misrepresentation or the non-disclosure of material facts on the part of the taxpayer.

For SARS to assess after the three-year prescription period, two requirements must be met: (1) there must be fraud, misrepresentation or non-disclosure by the taxpayer; and (2) the fraud, misrepresentation or non-disclosure must have been the reason why the full amount of tax was not assessed – in other words, there must be a causal link between the taxpayer’s conduct and the incorrect assessment. If either of these requirements are not met, SARS is not entitled to make adjustments to your income tax assessments that are over three years old.

It is often difficult to determine whether a taxpayer has made a “misrepresentation” which could give SARS licence to overlook the three-year prescription period. This often turns on whether the taxpayer merely asserted a genuinely held legal opinion (which should not override prescription, even if the opinion is ultimately found to be incorrect), or whether the taxpayer actively misrepresented the relevant facts that resulted in the incorrect assessment. For example, is it a “misrepresentation” to claim a deduction for an expense that was genuinely incurred and which you think is a permissible deduction, even if SARS disagrees?

The recent decision by the High Court in Commissioner for the South African Revenue Service v Meiring Citrus (Pty) Limited (“Meiring“) demonstrates that there can be a fine line between simply taking a legal position that SARS believes is incorrect, and making a factual misrepresentation.

The Meiring case concerned the deduction of a premium paid by the taxpayer under a contract. SARS disallowed the deduction more than three years after it was claimed, but argued that prescription did not apply because the taxpayer had made a misrepresentation “in relation to the characterisation of the premium as a deductible expense”.

According to the Tax Court, SARS was essentially taking the point that the taxpayer had made a “misrepresentation” by claiming a deduction that SARS believed was not legally permissible, and on this basis alone SARS argued that it could override prescription. Clearly, it would completely defeat the point of prescription if a difference in opinion as to a legal point could be regarded as a “misrepresentation” that allows SARS to reopen prescribed assessments. Recognising this, the Tax Court found against SARS. It reasoned that, in claiming the deduction, the taxpayer expressed a legal opinion which, even if found to be incorrect, could not be regarded as a misrepresentation of fact that overrides prescription.

The case was taken on appeal, and in the recently released Meiring judgment the High Court overturned the Tax Court’s findings. The High Court found that, although the taxpayer expressed a legal opinion in claiming the deduction, that legal opinion had to be based on a set of facts, being the terms and conditions of the contract. The court found that, on the facts, there had been a “misrepresentation” because the taxpayer did not bring the relevant factual information to the attention of SARS when it submitted its initial tax return, and it had initially neglected to submit a copy of the contract to SARS after its tax return was selected for verification and additional information was requested.

It appears from the High Court’s reasoning that the “characterisation of the premium as a deductible expense” was regarded as a “misrepresentation” in this case because it was accompanied by a failure to disclose the terms and conditions of the contract on which the deduction was based. Based on this understanding of the judgment, the High Court’s characterisation of the taxpayer’s behaviour as a “misrepresentation” is somewhat perplexing, as it appears that the real issue was in fact the “non-disclosure” of the terms and conditions of the contract.

Had the taxpayer provided SARS with a copy of the contract when it was required to do so, it is questionable that it could still be regarded as having made a “misrepresentation” in claiming the deduction in its tax return.

The takeaway from the judgment is that SARS does not have free rein to reopen old assessments simply because it disagrees with the legal position taken by the taxpayer – for example, that a particular expense is deductible. However, taxpayers should take care to make full and accurate disclosure to SARS to ensure that there is no justification for revisiting historical tax assessments.

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Brand owners take note. Effective 2027 China will amend its Trade Mark Law. Efforts to curb trade mark hoarding are further prioritised coupled with more stringent accountability.

China passed a fifth revision to its Trade Mark law in June 2026, effective 1 January 2027.

Significant changes include enforcement measures by the State Council against bad faith registrations and State Council non-use cancellations, the recognition of well-known marks and online trade mark use. The opposition period is reduced from three to two months on publication, increasing efficiency.

Bad Faith

Bad-faith applications and the hoarding of registrations or “trade mark squatting” remains a significant issue for brand owners who are active in China. If someone else owns your mark without your authorisation, your preferred agent or distributor may be reluctant to act on your behalf. Imports could also be detained at customs. The revision sees a shift towards further enforcement against bad faith registrations amending the existing provision from “not for the purpose of use” to disallowing marks that are “not intended for use and clearly exceeding normal production and business needs” with the State Council permitted to impose fines and revoke trade marks.

Non-use cancellations

An applicant should have a bona fide intention to use a trade mark for the goods and services for which registration is sought in the relevant territory. Generally, a registered a trade mark may be vulnerable to cancellation for non-use if it has not been used for a certain period, being three years in China. Non-use cancellations commonly require active steps by an interested third party.

Some territories, such as the U.S.A. require a Declaration of Use and specimens of use on filing the application and/or on renewal to maintain a registration. While Declarations of Use may have been tabled in drafting China’s fifth revision, the final revision does not stipulate Declarations of Use.

Despite this, ex officio cancellations will be allowed whereby the State Council may cancel trade marks that have become generic or have not been used for three consecutive years without legitimate reason. This is a significant change as non-use cancellations may also now be initiated by the authorities.

Well-known marks

A well-known mark or famous mark is a trade mark that has achieved such a degree of recognition among the relevant public that it is afforded a broader scope of protection than ordinary trade marks, beyond the goods or services for which it is registered and without registration.

The fifth revision recognises well-known marks however the onus to establish well-known status remains high requiring substantial evidence of market recognition, including survey evidence, revenue, advertising expenditure, media coverage and decided on a case by case basis. This is a significant introduction whereby marks which imitate a well-known mark or mislead the public to the detriment of the rightful owner will not be registered and that use forbidden.

Online use

The revision defines evidence of use of a mark on goods, packaging, commercial transaction documents, advertising, exhibitions and other commercial activities for the purpose of identifying and distinguishing the source of goods.  Other commercial activities includes evidence of use of the mark on the internet, e-commerce platforms, social media and digital advertising which should ease the burden of providing evidence of use in non-use cancellations and contentious matters.

Procedural revisions

Further changes include reducing the opposition term from three to two months and a one-year bar on filing only following a voluntary cancellation. Motion marks and sound marks are a further expansion. There is also a significant move to stringent control and accountability for trade mark agencies and practitioners who will be required to register their information with the State Council Trademark Authority with failures attracting hefty fines.

Practical take-aways

There is always the risk of non-use cancellations however particularly so in China as it is a common recourse in review proceedings where a trade mark has been refused due to a prior mark that may in turn be vulnerable to cancellation. The recognition of online use should assist brand owners in defending non-use cancellations. Considering the authorities will too have the ability to initiate cancellations of marks that have become generic or have not been used for three consecutive years without legitimate reason, brand owners are reminded to conduct regular portfolio reviews, keep records in order and ensure that registrations are in genuine use.

Please contact Werksmans Intellectual Property practice area for further advice and assistance.

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In recent years, South Africa has declared two national disasters aimed at protecting thousands of lives. One brought the country to a standstill, while the other barely makes news headlines. This response raises important questions about how crisis, urgency and protection are understood. When the COVID-19 pandemic reached South Africa, the State responded with  speed and force using, the law as a tool to protect lives. Within days, a National State of Disaster was declared under the Disaster Management Act 57 of 2002, and regulations were issued in terms of the Act. Lockdowns and curfews were imposed, movement was restricted, alcohol and cigarette sales were banned, budgets were redirected, and daily briefings and statistics reminded the nation that lives were at stake. The legal effects were immediate and visible to the public.

South Africa has one of the highest female homicide rates in the world, measured at 12.2 per 100 000 population in 2024, compared with the global average of 2.2 per 100 000. Add to this child murders, over 12 000 sexual offences reported in the first quarter of 2026, and the fact that many crimes go unreported, and the real scope of the crisis becomes visible.

These figures point to a deeply rooted and ongoing problem. In December 2025, the government formally classified GBVF as a national disaster under the Disaster Management Act, following intense public advocacy and nationwide protests calling for urgent action. This recognition was widely welcomed as an important acknowledgement of the harm caused by GBVF. However, for many South Africans, there has been no meaningful change, leading to confusion and concerns about what the declaration  means in practice. The Disaster Management Act provides a flexible framework for responding to disasters that cannot be managed through ordinary legal systems. It allows the head of the National Disaster Management Centre to classify an occurrence as a disaster and empowers the relevant minister to issue binding regulations, allocate emergency funding, and mandate coordination between different parts of government.

During Covid-19, these powers were put into operation and had a direct impact on daily life. However, the classification of GBVF as a national disaster did not automatically trigger the type of emergency regulatory framework that South Africans experienced during the COVID-19 pandemic. The government has indicated that the disaster response will be implemented largely through existing legislation, institutions and programmes rather than through new disaster management regulations or measures.

The language used in the Gazette declaring GBVF a disaster is also very different to the Gazettes detailing Covid-19 regulations. For example, the GBVF gazette “encourages individuals to refrain from acts of gender-based violence” while the Covid-19 regulations “direct” municipalities to “immediately close all public spaces that do not serve a public purpose”.

To date, no comprehensive set of GBVF-specific disaster management regulations or measures comparable to those introduced during the COVID-19 pandemic have been promulgated. The State’s response to the COVID-19 pandemic, and how it is responding to GBVF raises questions about  what it truly means when something is declared a national disaster. GBVF is a complex social issue that is shaped by history, inequality, culture, economic stress, and power dynamics within families and communities. It is not easily addressed through short-term rules in the same way that a public health emergency can be. At the same time, the absence of a clear legal framework linked to the disaster declaration has practical consequences.

Without binding rules, measures, or clear lines of accountability, the response to GBVF continues to rely largely on existing systems, many of which are already stretched thin. For ordinary South Africans, this creates a sense of uncertainty. If GBVF is a national disaster, people naturally expect something to change in a visible and concrete way. When that change does not materialise, the declaration can feel distant from lived reality. It may also be perceived as a symbolic or performative act, rather than one that brings about meaningful change. If the language of “national disaster” is to retain its meaning within South Africa’s legal framework, it must be accompanied by measures that are visible and capable of producing real change. Recognition is important, but that alone cannot protect those at risk of GBVF.

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