NAURU INTRODUCES NEW BENEFICIAL OWNERSHIP REGULATIONS

Strengthening Transparency and Accountability in Nauru’s Beneficial Ownership Regime

The Republic of Nauru has recently implemented new regulations aimed at enhancing the country’s beneficial ownership regime. The Beneficial Ownership (Identity and Declaration) (Amendment) Regulations 2024 came into effect on March 28, 2024, with the primary goal of increasing transparency and accountability in the country’s financial system.

Key Provisions of the Amended Regulations

• Disclosure of Criminal History: Individuals with a significant or controlling interest in a local entity must disclose their previous convictions.
• Details of Convictions: Beneficial owners who have been convicted of an offense must provide details, including:
  • Nature of the offense
  • Act or regulation under which it was committed
  • Date of conviction
  • Penalty or sentence
  • Impact on their ability to hold or manage a significant or controlling interest in a local entity

Authority’s Power to Request Additional Information

• The Authority may request additional information from beneficial owners who have made declarations.
• Failure to provide the requested details may result in:
  • Declination of application for registration as a beneficial owner
  • Notice to show cause why they should be removed from holding an interest in a local entity

Criticism and Concerns

Critics argue that the new regulations do not go far enough in addressing money laundering and other financial crimes. They point out that the amendments only apply to individuals who have already been convicted of offenses, leaving loopholes for those who have not yet been caught or charged.

Government’s Response

The Nauru government maintains that the new regulations are a step towards increasing transparency and accountability in the country’s beneficial ownership regime. The move is seen as part of efforts to strengthen anti-money laundering laws and prevent illicit financial activities.

International Anti-Money Laundering (AML) Standards

Beneficial ownership is a key concept in international AML standards, referring to who ultimately owns or controls an entity. Nauru has been working to improve its AML framework in recent years, with the aim of reducing the risk of money laundering and other financial crimes.

Positive Steps towards Greater Transparency

The new regulations are seen as a positive step by advocates for greater transparency and accountability in the country’s beneficial ownership regime. However, critics argue that more needs to be done to address concerns around money laundering and other illicit activities.