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Uncovering Hidden Control: A Guide to Identifying Beneficial Owners in Oman

Understanding the Complexities of Beneficial Ownership in Legal Arrangements, Waqf, Government Ministries, and More

As part of its efforts to combat financial crime and maintain transparency, the Omani government has issued new guidance on identifying beneficial owners (BOs) in various legal arrangements. This comprehensive guide aims to provide a clear understanding of the complex processes involved in determining BOs in Oman.

Direct Control vs. Indirect Control

The concept of beneficial ownership is often misunderstood, with many assuming that direct control equals ownership. However, indirect control can also be exercised through formal or informal agreements, nominee shareholders, and personal connections.

Identifying Beneficial Owners

The guidance highlights the importance of identifying BOs in legal arrangements, including trusts, Waqf, government ministries, and government-owned companies. The process involves tracing the chain of control, identifying individuals with significant authority over the entity’s management, and obtaining foundational documents and ancillary agreements.

Waqf: A Charitable Endowment

A Waqf is a charitable endowment that permits individuals to donate property for public good in the name of Allah. When involved, financial institutions must identify the founder, administrators, regulators, and any natural person exercising ultimate control over the trust.

Government Ministries and Government-Owned Companies

The guidance emphasizes the importance of identifying BOs in government ministries and government-owned companies. The minister responsible for the area, chairman or members of supervisory boards, management boards, and authority signatories can be considered BOs.

Financial Trusts and Collective Investment Funds

In addition to legal arrangements, trusts, and Waqf, financial institutions must also identify BOs in financial trusts and collective investment funds. The guidance provides a detailed explanation of the process involved in identifying BOs in these complex structures.

Conclusion

The identification of beneficial owners is a critical step in maintaining transparency and combating financial crime. This comprehensive guide aims to provide financial institutions with the necessary tools and understanding to effectively identify BOs in Oman’s legal arrangements, trusts, Waqf, government ministries, and more. By adhering to these guidelines, financial institutions can ensure compliance with Omani regulations and maintain a strong reputation in the global financial market.

Recommendation

Financial institutions are recommended to refer to relevant laws, regulations, and circulars applicable to government companies and opening accounts for government-related entities when dealing with BO identification.