Transparency Takes Center Stage in Afghanistan

Introducing New Regulations for Beneficial Ownership Disclosure

Kabul, Afghanistan - The Afghan government has made significant strides towards greater transparency over beneficial ownership in the country. In line with global standards and recommendations from international organizations such as the Financial Action Task Force (FATF), Afghanistan is introducing new regulations that require companies to disclose their beneficial owners.

Global Trends in Beneficial Ownership Disclosure

According to a recent report by the Law Library of Congress, which surveyed laws related to registration of beneficial owners in 29 countries around the world, most jurisdictions have recently amended their legislation or are currently working on amending their laws to address this issue. However, Afghanistan is one of the few countries where such regulations were introduced after the G-20 summit in Brisbane, Australia in 2014.

Definition of Beneficial Owner: A Global Perspective

The report highlights that the definition of beneficial owner varies among countries, with some adding individuals with a “relevant interest” or a “person with significant control.” In Afghanistan, the definition accepted by the EU and its Member States is based on FATF Guidance, which defines a beneficial owner as a natural person who ultimately owns or controls a company.

Afghanistan’s Approach to Beneficial Ownership Disclosure

In Afghanistan, companies will be required to submit information about their beneficial owners to the registering authority. The report notes that access to this information will be determined differently in each country, with some jurisdictions providing open access to public registers of beneficial ownership while others limit access to law enforcers or monitoring government authorities.

Penalties for Non-Compliance

The report also highlights that most countries view public beneficial ownership registration as an anti-money laundering tool that works in alignment with other legal mechanisms. In the case of a failure to disclose beneficial owners, companies may face penalties such as fines, de-registration, or imprisonment.

Positive Steps Towards Financial Stability

The Afghan government’s move towards greater transparency over beneficial ownership is seen as a positive step towards enhancing the country’s financial stability and reducing the risk of money laundering.

Key Takeaways

• Afghanistan introduces new regulations requiring companies to disclose their beneficial owners
• Definition of beneficial owner varies among countries, with some adding individuals with a “relevant interest” or a “person with significant control”
• Access to information about beneficial owners will be determined differently in each country
• Companies may face penalties such as fines, de-registration, or imprisonment for failure to disclose beneficial owners
• Afghan government’s move is seen as a positive step towards enhancing financial stability and reducing the risk of money laundering