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Beneficial Ownership Determination in Uganda: A Critical Step Towards Transparency
The Ugandan government has taken a significant step towards increasing transparency and combating financial crimes by introducing beneficial ownership determination regulations. This new requirement mandates that all registered entities and arrangements in the country disclose their beneficial owners to the Registrar of Companies.
What is a Beneficial Owner?
According to Section 21 of the Companies (Amendment) Act, 2022, a beneficial owner is defined as:
- A natural person who has final ownership or control of a company/partnership
- A natural person on whose behalf a transaction is conducted in a company/partnership
- A natural person who exercises ultimate control over a company/partnership
The Importance of the Beneficial Ownership Register
The law requires that every registered entity or arrangement maintain a beneficial ownership register, which contains personal information about the beneficial owners, including:
- Names
- National identification numbers
- Postal addresses
- Tax identification numbers
- Date on which each beneficial owner was entered in the register
- Date on which they ceased to be a beneficial owner
The registry plays a crucial role in facilitating the work of anti-money laundering (AML) and combating the financing of terrorism (CFT) supervisory authorities, as well as streamlining the customer due diligence process for AML/CFT-obligated entities.
Consequences of Non-Compliance
Failure to comply with these regulations can result in serious penalties, including:
- Fines
- Imprisonment
It is essential for all registered entities and arrangements to understand their obligations under this new law and take immediate action to ensure compliance.
Conclusion
The introduction of beneficial ownership determination regulations in Uganda marks a significant step towards increasing transparency and combating financial crimes. It is crucial that all stakeholders work together to ensure the successful implementation of these regulations and achieve their intended objectives.