Verification of beneficial ownership data
Sanctions
All verification measures should be enforced by a comprehensive, proportionate and dissuasive sanctions regime, including monetary fines and other penalties, in order to improve compliance and improve data quality, which may cover:
- the person submitting the BO declaration (e.g. notary);
- registered officers of the company;
- the beneficial owner(s);
- the company making the disclosure.
Sanctions should cover failure to submit information, submitting incorrect information (deliberate or otherwise), or not submitting information on time. Sanctions can be extended to include penalties for the failure to report suspicious information under AML reporting obligations. Non-monetary fines can include stripping certain national and business related rights, such as not being able to incorporate a company or not being paid out dividends from shares.
Example: France
In France, late or incorrect submissions can lead to a person being prevented from engaging in certain business activities or stripping certain national and civil rights, such as being placed under judicial supervision. In addition, the person responsible is subject to six months of imprisonment and a fine of €7,500. The sanction for the company is equal to five times the sanction applicable for a person. [15]
Example: Ghana
In Ghana the fines for not updating information are USD350, [16] which, according to local sources, are deemed so low by some companies they opt to pay these rather than update the information.
Footnotes
[15] FATF, “Best Practices on Beneficial Ownership for Legal Persons”. October 2019. Available at: https://www.fatf-gafi.org/media/fatf/documents/Best-Practices-Beneficial-Ownership-Legal-Persons.pdf [Accessed 20 April 2020].
[16] EITI, “Legal approaches to beneficial ownership transparency in EITI countries”. June 2019. Available at: https://eiti.org/files/documents/legal_approaches_to_beneficial_ownership_transparency_in_eiti_countries.pdf [Accessed 20 April 2020].