BARBADOS: Beneficial ownership register to improve compliance.

Barbados’ ability to comply with international requirements regarding access to, and reporting on, beneficial ownership information is about to be strengthened.

Kevin Hunte, Director of International Business of the International Business Unit (IBU) in the Ministry of Business Development, said a policy proposal was currently before Government for consideration for the establishment of a beneficial ownership register.

This is expected to result in more timely, accurate and up-to-date information to satisfy international requirements regarding transparency and beneficial ownership.

As part of the aim of the Financial Action Task Force (FATF) to deter and prevent the misuse of companies, trusts, foundations and other types of legal persons and legal arrangements from engaging in money laundering, corruption and other illegal activities, countries are required to meet certain standards on transparency and beneficial ownership.

According to FATF, a beneficial owner refers to the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement.

The intergovernmental organisation posits that countries should take measures to prevent the misuse of legal persons for money laundering or terrorist financing and that “countries should ensure that there is adequate, accurate and timely information on the beneficial ownership and control of legal persons that can be obtained or accessed in a timely fashion by competent authorities”.

It also requires countries to “ensure that there is adequate, accurate and timely information on express trusts, including information on the settlor, trustee and beneficiaries, that can be obtained or accessed in a timely fashion by competent authorities”.

During a recent global business update seminar hosted by the Barbados International Business Association (BIBA), Hunte noted that there was still a challenge with the IBU maintaining up-to-date and accurate beneficial ownership information.

As a result, he said, the Ministry of Business Development recently submitted to Cabinet, a Paper “for the establishment of a beneficial ownership register to ensure that competent authorities and law enforcement agencies have timely access to accurate and updated beneficial ownership information for all legal persons in Barbados”.

 

“The ability to effectively monitor companies’ obligations to maintain beneficial ownership information at the registered office has been a source of concern by both the OECD (Organisation for Economic Cooperation and Development) and the FATF,” said Hunte.

“The main cause of concern as communicated to us is that, ‘the rate of monitoring of companies compared to the number of companies on the register renders the current system without more, incapable of satisfying international authorities that Barbados is able to access that beneficial ownership information for all the entities on its register in a timely manner’,” he said.

Hunte reported that Cabinet has accepted and agreed on the policy paper for the establishment of a beneficial ownership register, adding that this will have tremendous benefits for the island.

“The beneficial ownership paper will clearly demonstrate Barbados’ effectiveness, and I am assuring you that the beneficial ownership information will be accessed in a timely manner by competent authorities and law enforcement,” said Hunte.

“In arriving at this decision, it is envisaged that some of the benefits would be certainty in the Barbados landscape; that Barbados would be able to say and demonstrate that a competent authority has access to beneficial ownership information for all entities in the jurisdiction and this addresses head-on [the] immediate outcome 5 and recommendations [proposed by FATF],” said Hunte.

“One of the additional benefits is that we have the ability to ensure that the beneficial ownership information gathered by the various authorities in Barbados is up-to-date and that it is kept in a secure environment and that there are correspondent penalties for failure to provide accurate information, thereby demonstrating that we are a well-regulated jurisdiction,” he added.

He acknowledged that there will be a need for legislation to facilitate the effective storage of beneficial ownership and shareholder information and to ensure it is only accessible by the registrar.

During the BIBA update, Hunte revealed that “there is also a dire and urgent need for the corporate register to be sanitised and devoid of all entities that are no longer in existence so that for Barbados and our international assessors, a true picture of our corporate landscape can be displayed and accessed for all to see”.

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