The Register-General Jemima Oware, has announced the deployment of a new Central Beneficial Ownership Register for all companies operating in the country.
According to her, the deployment will begin from the 21st to the 28th of September, 2020, with the extractive industry and other high risk sectors like banks and other financial institutions.
The use of the Beneficial Ownership regime which is in accordance with the Companies Act 2019 (Act 992) is a major step being taken by government to enable the country fight against corruption, money laundering, terrorism financing and other forms of financial crimes.
Speaking to Citi Business News, Madam Jemima Oware stated that from October 2020, whoever wishes to register a company to operate in the extractives industry should visit www.rgd.gov.gh, to download the beneficial ownership form and provide the data on who the beneficial owners of the company are.
“All registers must list the ultimate beneficial owner (UBO) and include the same basic information: name, month of birth, nationality, country of residence, and nature/size of the interest held in the companies or entities and the Tax Identification Numbers (TIN),” she said.
She warned that failure to disclose the Beneficial Ownership information accurately will attract serious sanctions.
“Failure to disclose the Beneficial Ownership information accurately will attract a fine of 150 penalty units or 2 year imprisonment or both. We collaborate with EOCO, CHRAJ and FIC. These are very competent institutions and we share information with them. So the data has to be accurate on all sides because we would find out if you lie to us, ” the Registrar-General noted.
She further noted that no thresholds exist for shareholders and directors of extractive industries players operating in Ghana.
“Whether you own 1 percent or 2 percent that has to be disclosed. However, if it’s a foreign company within the extractives industry operating in Ghana, that shareholder must have at least 5% before the disclosure is made on the BO register.”
She urged all other companies to prepare, compile and submit their Register of Members and the full details of the Beneficial Owners between now and the 31st of December, 2020, to provide the beneficial ownership information when they come to file their Annual Returns.
What is Beneficial Ownership?
Beneficial ownership is a term in domestic and international commercial law that refers to the natural persons who exercise significant influence over and receive profits from a company who are not its legal owners.
Following the release of the Panama Papers and the global efforts to address issues related to anti-corruption and tax evasion, the Ghanaian government has been under pressure to act on beneficial ownership disclosure, hence the passage of the new Companies Act, 2019, (Act 992).
Also, the World Bank, notes that roughly 70% of the biggest corruption cases between 1980 and 2010 involved anonymous companies. When it comes to the oil, gas, and mining sectors, it has been estimated that up to US$1 trillion is siphoned out of developing countries in lost tax revenues through shell companies that hide their beneficial owners.
But the Registrar-General states that government is committed to meeting a number of international obligations regarding the implementation of the Beneficial Ownership regime.
She explained that Government in partnership with the Financial Intelligence Centre (FIC), the Ghana Extractive Industries Transparency Initiative (GEITI) and Financial Action Taskforce would help in meeting the deadline for the various beneficial ownership requirements.
According to Mrs Jemima Oware, none of the country’s laws provided for disclosure of beneficial ownership, until last year. This made it easier for companies to hide the identities of their owners if necessary.
“Some people can assign a “nominee” in relation to their shareholding or directorship position at the board and they would be at the back end controlling affairs, they would have a legal arrangement with such persons that we would not be privy to…but things have changed now,” she said.
According to her, a lack of information about who owns and controls businesses incorporated in Ghana is creating a “dangerous and widening gap” in the country’s fight against corruption, money laundering terrorism financing and other forms of financial crimes.
“With the passage of the new Company’s Act, 2019, (Act 992) the “ease of doing business in Ghana” has been enhanced and it has simplified the process of company registration to ensure that Ghana, as the gateway to Africa, becomes a competitive and transparent investment destination,” she added.
Key Issues addressed under the new Beneficial Ownership Regime
The new beneficial ownership regime addresses four key issues:
1. It strengthens the disclosure requirements: Reinforcing underlying legal and regulatory requirements for disclosure of different types of ownership across various legal vehicles is fundamental to more effective, transparent processes.
2. It improves the interoperability of information. Applying common standards such as the Beneficial Ownership Data Standard and linking ownership information with other policy areas can help to track money and assets across sectors and jurisdictions.
3. It verifies registered information. Open beneficial ownership data, coupled with strong verification systems, ensures data is accurate and useable.
4. It engages citizens in monitoring and accountability. Informal and formal channels for accountability enable citizens to actively use ownership data to uncover networks of corruption.
Beneficial Ownership disclosure and data protection
She disclosed that the RGD recognizes that ensuring beneficial ownership data is publicly accessible while protecting an individual’s right to privacy is an important concern.
However, though these concerns exist, the need to protect people’s data will be respected especially in an era of high profile data breaches.
The Registrar-General noted that beneficial ownership information is generally considered a different class of data because it is collected as a result of a company’s desire to engage in or complete a financial activity in a specific market under the name of a specific legal entity and that these benefits differentiate ownership from holding assets under a private name.