Financial Crime World

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Beneficial Ownership Disclosure: The Ghanaian Perspective

In recent years, the concept of beneficial ownership disclosure has gained significant attention globally. This practice involves revealing the true owners of companies, often used as fronts for illicit activities such as money laundering and terrorist financing.

Background to Beneficial Ownership Disclosure

The Financial Action Task Force (FATF) conducted a study in 2006 that revealed the lack of adequate, accurate, and timely beneficial ownership information on companies in jurisdictions, including Ghana. This allowed money laundering and terrorist financing to flourish in those jurisdictions. Consequently, the FATF recommended its Recommendations 24 and 25 on transparency and beneficial ownership of companies.

Ghana’s Journey to Beneficial Ownership Disclosure

In response to the FATF recommendations, Ghana implemented a beneficial ownership disclosure regime by amending the now repealed Companies Act, 1963 (Act 179). The Companies (Amendment) Act, 2016 (Act 920) mandated the inclusion of names and particulars of beneficial owners in the register of members. This was later restated in the Companies Act, 2019.

Who Must Disclose Beneficial Ownership?

The beneficial ownership disclosure regime applies to all companies registered in Ghana. The threshold for disclosure is as follows:

  • A natural person who has a direct or indirect interest of 20 percent or greater.
  • Foreign politically exposed persons with an interest of 5 percent or greater.
  • Domestic politically exposed persons with any amount of shares or form of control.

Sanctions for Non-Compliance

Non-compliance with the beneficial ownership disclosure requirements attracts payment of a fine or a term of imprisonment not exceeding two years, or both. This serves as a check on companies hiding share ownership or control.

Challenges Associated with Implementation

While the beneficial ownership disclosure regime has been implemented in Ghana, there are still challenges associated with its implementation. Some of these challenges include:

  • Technical challenges related to the verification of information obtained on beneficial owners.
  • The reluctance of foreign beneficial owners to procure a Tax Identification Number (TIN) due to concerns about tax liabilities.

Conclusion

Beneficial ownership disclosure is an essential practice in ensuring best practices in business operations. While there are issues associated with its implementation, businesses must comply with the requirements. To achieve compliance, beneficial owners must take steps to procure TINs and submit completed Beneficial Ownership Forms to the Registry. The Registrar must also develop a verification system to ensure accuracy of the data.

By following these measures, Ghana can effectively implement the beneficial ownership disclosure regime and prevent illicit activities such as money laundering and terrorist financing.