FATF Report: Assessment of Technical Compliance with Recommendation 24 in Ethiopia

Overview

The Financial Action Task Force (FATF) has assessed the technical compliance of Ethiopia with FATF Recommendations, specifically Recommendation 24 on Beneficial Ownership and Control. This report highlights key points regarding the country’s implementation of this recommendation.

Key Findings

Beneficial Ownership Requirements

• The Commercial Code 2021 requires companies to keep information on beneficial owners at their registered offices.
• However, there is no legal requirement to keep information on directors or senior management personnel at the same location.

Availability of Information

• Ethiopian laws can be accessed by members of the public.
• The process of creating legal persons (business organizations) can be accessed on the website of the Ministry of Trade.
• However, the website does not contain information required under Recommendation 24.

Timeframe for Updating Information

• The 60-day period allowed to update the Commercial Registry may be too long, resulting in limited access to accurate and updated information by competent authorities.

Retention of Records

• Financial Institutions (FIs) and Designated Non-Financial Businesses and Professions (DNFBPs) are required to keep records for 10 years after ceasing business relationship with clients or customers.
• However, the Commercial Code 2021 puts this obligation on the relevant Government Authority.

Sanctions

• Ethiopia has not demonstrated relevant provisions for failure to file annual returns.

Conclusion

Based on these outstanding minor deficiencies, Recommendation 24 has been upgraded from “Partially Compliant” (PC) to “Largely Compliant” (LC).