Belize’s Lack of Beneficial Ownership Requirements Puts Country at Risk
Beneficial ownership refers to the individual or individuals who truly control and economically benefit from a company. However, in Belize, this information is often not available or inaccurate, allowing companies to be used as vehicles for illicit activity.
Case Studies
Brad’s Gaming Group Ltd.
Brad’s Gaming Group Ltd., which held an exclusive license to run government lottery games, was majority owned by Good Lee Limited, an offshore company registered in St. Lucia. However, the beneficial owner(s) of Good Lee Ltd. is unknown, and three of its directors are companies registered in St. Lucia and Dominica. This lack of transparency has raised concerns about fraud and conflicts of interest.
Robert Bandfield’s Money Laundering Scheme
Robert Bandfield, a U.S. citizen, pleaded guilty to money laundering conspiracy for setting up fraudulent shell companies in Belize. He used these companies to manipulate the stocks of dozens of U.S. publicly traded companies, concealing the ownership interests of his clients.
The Risks
The lack of beneficial ownership requirements in Belize puts the country at risk of:
- Tax evasion
- Corruption
- Money laundering
- Terrorism financing
To combat these issues, it is crucial that the government collects this information.
Current State of Beneficial Ownership Requirements
Belize requires financial entities to obtain beneficial owner information from their clients, but this information is not automatically reported to the government. The government also has an official definition for a “beneficial owner” in the Money Launderning and Terrorism (Prevention) Act, which requires companies to maintain a list of individuals who own or control 10 percent or more of the entity.
Recommendations
To address the issue of beneficial ownership transparency, experts recommend that the government:
- Pass a law requiring legal persons and arrangements to declare their ultimate beneficial owner(s) to the government
- Create a central beneficial ownership registry
- Make the registry easily accessible to all relevant government agencies as well as the public
- Impose penalties for failure to provide accurate and updated beneficial ownership information
- Work with stakeholders, including the private sector, civil society, and the media, to implement progressive best practices in beneficial ownership transparency
Key Questions Remaining Unanswered
- How will beneficial ownership information be stored?
- Which government agency will be responsible for maintaining it?
- What type of legal persons and arrangements will be covered by the law?