Prison Time Looms for Those Who Violate Beneficial Ownership Disclosure Laws
In a bid to combat money laundering and terrorist financing, the Republic of Nauru has introduced severe penalties for individuals who fail to disclose beneficial ownership information or tip off others about ongoing investigations.
Severe Penalties for Non-Compliance
According to Section 19 of the Beneficial Ownership Act 2017, any person found guilty of tipping off someone else about a notice issued under Section 16(2) can face:
- Imprisonment not exceeding three years
- A fine not exceeding $50,000
- Both imprisonment and a fine
These penalties apply to individuals who know or suspect that a notice has been issued or is proposed to be issued in respect of a legal entity.
Prevention of Information Disclosure
The provision aims to prevent the disclosure of information that may prejudice criminal, civil, or regulatory investigations or proceedings related to the issue of the notice. The law does not exempt legal practitioners from prosecution if they disclose information for purposes other than providing legal advice to clients or in connection with legal proceedings.
Compliance Requirements
Section 21 of the Act requires nominated officers to submit beneficial ownership information to the Authority within specified timeframes. Failure to comply with these provisions can result in:
- Imprisonment not exceeding three years
- A fine not exceeding $50,000
- Both imprisonment and a fine
Late Delivery Penalties
The laws also provide for late delivery of notices upon payment of a fixed penalty of $1,000. However, this provision does not apply where criminal proceedings have commenced and have not concluded.
Implementing International Standards
The Beneficial Ownership Act 2017 is part of the country’s efforts to implement international standards on combating money laundering and terrorist financing. The law aims to enhance transparency and accountability in the financial sector by requiring legal entities to disclose their beneficial ownership information.
Key Takeaways
- Failure to disclose beneficial ownership information can result in severe penalties
- Tipping off others about ongoing investigations is also prohibited
- Compliance with provisions is mandatory, with late delivery penalties applicable in certain cases
- The law aims to implement international standards on combating money laundering and terrorist financing