Isle of Man will amend beneficial ownership regime to satisfy MONEYVAL

Monday, 14 September 2020
The Isle of Man government has issued a consultation on amendments to the Beneficial Ownership Act 2017 (the Act), intended to address compliance deficiencies identified by the Council of Europe's anti-money laundering watchdog MONEYVAL.
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MONEYVAL conducted a mutual evaluation report on the jurisdiction in 2016, concluding, among other things, that its beneficial ownership regime was only moderately effective and the accuracy of the data held on the register could be improved. The Act, as it stood at the time, required relevant beneficial ownership details to be provided within three months, which MONEYVAL’s inspectors considered to be too long a period to ensure accuracy of the details held for so-called 1931 companies, limited partnerships or general partnerships.

The new proposals therefore include an amendment to s.9 of the Act, requiring an entity's legal owner to supply their identification details to the nominated officer within one week of incorporation of the legal entity. Section 10 is also being amended to clarify that a beneficial ownership or intermediate owner must now notify their details to a legal owner within one week. The section title is also being changed to emphasise that the various owners must notify the legal owners as well as ‘assist’, indicating that there is now a proactive requirement to notify as well as a reactive element.

Section 20 is to be amended to give the Department for Enterprise (the Department) powers to issue regulations on the 'reasonable steps' to be taken by nominated company officers, especially if a nominated company officer reports that the entity has no registrable beneficial owners. Details of beneficial owners are to be submitted to the departments within time limits that have not yet been published.

A new subsection is to be added, giving the Department powers to verify the information submitted and remove any suspected false information from the database. These additional powers are necessary for the Isle of Man to meet the international requirements to identify and verify the information on its database to ensure it is timely and accurate. Any person accessing the database must also notify the Department within a week if they find an entry they consider to be incorrect.

Other amendments will permit the extraction of anonymised data by relevant authorities in order to assist with international reporting obligations. This will further the jurisdiction's public commitment to deliver an effective public register of company beneficial ownership by 2023.

Consultation closes at 5:00pm on 21 October 2020.

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