Financial Crime World

Uncovering the Web of Control: The Quest for Beneficial Ownership Transparency

In an effort to combat money laundering and terrorist financing, governments worldwide have been working to improve beneficial ownership transparency. This crucial information enables authorities to track and prevent illegal activities, ensuring a safer financial system.

Strengthening Regulations in Guyana

In Guyana, the Companies Act and Anti-Money Laundering and Countering of Financing of Terrorism (AMLCFT) Act 2009 have been amended to strengthen regulations on beneficial ownership disclosure. The Registrar of Companies is tasked with maintaining accurate and current information about beneficial ownership and control.

What is Beneficial Ownership?

A beneficial owner is defined as an individual who exercises influence or control over a company, even if they do not own shares directly. This can be achieved through various means:

  • Consistently exercising influence or control over the company’s decision-making process
  • Amending the company’s business plan or changing its nature
  • Appointing or removing key executives, including the CEO
  • Holding a majority of voting rights through direct or indirect appointment or removal of directors

Beneficial ownership can also be exercised indirectly through trusts, foundations, and other legal arrangements. The Registrar must collect information on these entities, including:

  • Name, nature, and type of trust or arrangement
  • Identities of trustees, settlors, protectors, controllers, and beneficiaries

Ensuring Comprehensive Transparency

A multi-pronged approach is recommended to ensure comprehensive beneficial ownership transparency:

  1. Utilizing company-provided information
  2. Leveraging registry mechanisms or alternative mechanisms for rapid access to beneficial ownership data
  3. Supplementing this information with additional sources, such as:
    • Financial institutions’ customer due diligence (CDD) reports
    • Regulatory records

The Three Pillars of Beneficial Ownership Transparency

The three pillars of ensuring adequate, accurate, and up-to-date beneficial ownership information are equally important:

  • Company-provided information
  • Registry mechanisms or alternative mechanisms
  • Supplementary sources

Current Implementation in Guyana

In Guyana, the Company Approach, Registry Mechanism, and Supplementary Sources of Information are currently utilized. The Registrar can also utilize CDD information obtained from financial institutions and designated non-financial businesses and professions as an alternative mechanism.

Conclusion

The quest for beneficial ownership transparency is crucial in the fight against money laundering and terrorist financing. By strengthening regulations and leveraging a multi-pronged approach, governments can ensure a safer financial system for all stakeholders.

Sources:

  • Companies Act
  • Anti-Money Laundering and Countering of Financing of Terrorism (AMLCFT) Act 2009
  • Recommendations 24 standards
  • AMLCFT Act 2009 (Amendment) Act No. 15 of 2023