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Agreement To Strengthen Beneficial Ownership Transparency

The beneficiaries are individuals who, by direct or indirect means, have the ultimate ownership or who exercise control of a business. Footnote 5 These are different from the rightful owners who may be either a natural person. B, or another legal entity (for example, another company or trust). Economic property can be defined on the basis of equity (for example. B, directly or indirectly, who own more than a certain percentage of a business, for example. B 25% or through positions within the corporation (that of this individual control over strategic and executive decisions) or other means. Actual beneficiaries also include individuals behind designated shareholders, who refer to persons who are registered owners of shares in a company or who assume a management position on behalf of an economic beneficiary. The Finance Ministers of the Federal State, the Federal States and the Territories met and confirmed their intention to begin consultations on a publicly available register of beneficiaries. As global attention to corporate transparency continues, some countries have taken steps to establish their own economic property records. The United Kingdom was the first country in 2016 to establish a free public capital register for private companies, based on the concept of persons with significant control (PSCs). In 2018, the British Parliament also approved a bill requiring British overseas territories (for example). B the Cayman Islands, the British Virgin Islands) to establish public registers for actual beneficiaries by 2020.

In addition to the new rules, tougher and harsher penalties will be imposed for non-return or misrepresentation or omission in a Trust Return (including errors or incomplete disclosure of actual beneficiaries). If it is knowing negligence or gross negligence, the penalty is 5% of the value of the trust. As a result, an error or omission in the disclosure of a $10 million trust fund could result in a fine of US$500,000. In 2017, Canada`s Ministers of Finance, Provinces and Territories signed an agreement to increase the transparency of effective beneficiaries (the “agreement”). The agreement was reached to promote international agreements to prevent the misuse of companies and other legal entities for tax evasion and other criminal purposes, such as money laundering, corruption and terrorist financing. The agreement required ministers to “follow legislative changes … Ensure that companies maintain accurate and up-to-date information on actual beneficiaries available to law enforcement and tax and other authorities, and that “these changes come into effect by July 1, 2019.” Corporate governance in Canada is an area of shared responsibility between the federal government, the provinces and the territories.