Financial Crime World

Jordan Takes a Crucial Step Towards Transparency with Beneficial Ownership Disclosure

A Major Move towards Greater Transparency

Jordan’s Council of Ministers has approved Instruction No. 62 of 2022 for the Ultimate Beneficial Owners, as mandated by Article 273-d of the country’s Companies Business Law No. 22 of 1997.

The Aim: Shedding Light on Real Company Owners

This instruction aims to shed light on the real owners of companies in Jordan, a move that will help curb corruption and illicit financial flows. Beneficial ownership refers to the natural person or entity that ultimately controls or has significant influence over a company, often through complex chains of ownership.

What is Beneficial Ownership?

Beneficial ownership differs from legal ownership, which only reveals the level of ownership immediately above a company. Beneficial ownership exposes the true owners who ultimately have control over a company’s assets or income.

The Global Trend towards Transparency

Jordan’s move towards beneficial ownership transparency is part of a global trend. Over 100 countries have committed to implementing reforms to make this information available, while international organizations like:

  • Financial Action Task Force (FATF)
  • G7
  • G20
  • International Monetary Fund (IMF)
  • United Nations (UN)
  • World Bank

have also voiced their support for beneficial ownership transparency.

The Challenge: Ensuring Effective Implementation

While the new instruction marks a significant step forward, it is crucial that authorities ensure its effective implementation to prevent any loopholes or obstacles that might hinder transparency and accountability. This includes:

  • Requiring companies to disclose information about their ultimate beneficial owners
  • Identifying the decision-makers behind companies and holding them accountable for any wrongdoing

The Benefits: Increased Accountability and Transparency

This move is expected to increase accountability and transparency in corporate governance, as it will allow authorities to identify the decision-makers behind companies and hold them accountable for any wrongdoing.

A Global Concern: Shell Companies

In recent years, the use of shell companies has become a major concern globally. These paper companies, often set up in jurisdictions with weak disclosure requirements, are used to hide the identities of their anonymous owners and facilitate illegal activities such as money laundering and tax evasion.