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Mauritius Tackles Beneficial Ownership Transparency to Combat Financial Crimes
As governments around the world crack down on financial crimes, Mauritius has taken a crucial step towards increasing transparency by implementing beneficial ownership disclosure requirements. The country joins a growing list of nations that have recognized the importance of shedding light on the true owners of companies and arrangements.
Why Beneficial Ownership Transparency is Critical
Beneficial ownership transparency is critical in preventing illegal activities such as tax evasion, corruption, money laundering, and terrorist financing from going undetected. Anonymous companies have been linked to a significant proportion of corruption cases reviewed by the Stolen Asset Recovery Initiative, an initiative of the World Bank Group and the United Nations Office on Drugs (UNODC).
Countries Implementing Beneficial Ownership Transparency
In recent years, countries have begun requiring public disclosure of beneficial ownership information, revealing the identities of individuals who ultimately benefit from property rights. Mauritius has followed suit, introducing a streamlined process for entrepreneurs to file this information.
- The United States
- Europe
- Several developing economies
These countries have implemented policies aimed at increasing transparency. For example:
- United States: In April 2021, the US Financial Crimes Enforcement Network (FinCEN) solicited public comments on implementing the beneficial ownership reporting provisions of the Corporate Transparency Act.
- Europe: The European Commission introduced the 5th EU Anti-Money Laundering Directive (AML 5), requiring member states to establish public registries listing beneficial owners.
- India: India amended its Companies Rules in 2019, defining a “significant beneficial owner” as someone with at least 10% ownership of a company.
Other Countries Taking Action
Ghana and Kenya have also launched online central beneficial ownership registries, while Tunisia adopted a new legal framework on transparency in 2018. However, most economies still do not require companies to disclose beneficial ownership information within a clear time frame.
Costs of Filing Beneficial Ownership Information
The cost of filing beneficial ownership information varies across countries. While many economies charge no fee, some impose administrative costs. For example:
- Czech Republic: An administrative fee of US$47 is charged for registration with the commercial registry.
Practical Considerations
In practice, entrepreneurs starting a company may need to file beneficial ownership information at various stages. Some economies allow newly formed companies to file this information along with their business registration application. Others require separate filings with specific registries or notaries.
Mauritius has chosen to make the process easier by allowing company founders to submit beneficial ownership information directly to the Corporate and Business Registration Department of the Ministry of Finance, Economic Planning and Development at the time of incorporation. This streamlined procedure aims to promote compliance while increasing transparency in the financial sector.
Conclusion
As the world continues to grapple with financial crimes, Mauritius’s move towards beneficial ownership transparency is a significant step forward. By making the process easy and inexpensive, the country can encourage compliance and support law enforcement efforts.