The Register-General Jemima Oware, has announced the deployment of a new Central Beneficial Ownership Register for all companies operating in the country.
“We will start with the extractive industry and other high risk sectors like banks and other financial institutions,” She noted.
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.
She says the passage of the new Company’s Act, 2019, (Act 992) has enhanced the “ease of doing business in Ghana” by simplifying the process of company registration to ensure that Ghana, as the gateway to Africa, becomes a competitive and transparent investment destination.
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.
“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.
Mrs Oware explained that from October 2020, whoever wishes to register a company to operate in the extractives industry should visit www.rgd.gov.gh, download the beneficial ownership form and provide the data on who the beneficial owners of the company are.
No thresholds exists for shareholders and directors of extractive industries players operating in Ghana.
She said “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 per cent before the disclosure is made on the BO register.”
According to her, 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.
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 come under pressure to act on beneficial ownership disclosure, hence the passage of the new Companies Act, 2019, (Act 992).
The Registrar-General said, 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.
Key Issues addressed under the new Beneficial Ownership Regime
Jemima Oware said, “Criminals thrive when they have somewhere to hide, companies that exist only on paper—is a clear and present danger and this must stop with the establishment of the Central Beneficial Ownership Register.”
The Registrar-General explained that there are four key issues to be addressed by the new beneficial ownership commitments:
- Strengthening 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.
- Improving 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.
- Verifying registered information. Open beneficial ownership data, coupled with strong verification systems, ensures data is accurate and useable.
- Engaging citizens in monitoring and accountability. Informal and formal channels for accountability enable citizens to actively use ownership data to uncover networks of corruption.
Implementing Beneficial Ownership in high risk sectors.
According to the World Bank, roughly 70 per cent 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.
Mrs Oware explained further “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).”
In the mining, oil, and gas sectors, the implementation of the BO transparency disclosures are taking place through the Ghana Extractives Industries Transparency Initiative (GHEITI) with the support of the Registrar-General.
She emphasized that Ghana has made significant strides in achieving major milestones in the beneficial ownership roadmaps which requires that all companies applying for or holding a participating interest in an oil, gas, or mining license or contract in an EITI member country disclose their Beneficial Owners.
“This information will then be made publicly available through EITI country Reports and/or national Registries,” Mrs Oware noted.
Sanctions for non-disclosure of Beneficial Information data
She warned that failure to disclose the Beneficial Ownership information accurately attracts serious sanctions.
“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 emphasized.
She noted further that the beneficial ownership disclosure is a transparency tool that should be accepted by all members of the business community, especially Politically Exposed Persons.
Persons or individuals with trust instruments or any form of legal relationships drawn up between them and certain companies have to be disclosed.
Mrs Oware further served notice to 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.
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, Jemima Oware said that 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.