Uganda like many sub-Saharan countries, has been designated as a “jurisdiction under increased monitoring (the Grey list) 1” by the Financial Action Task Force (FATF). This has put immense pressure on the country to create an effective framework to combat Money reputation to avoid the fate of being listed alongside Iran, Myanmar, and North Korea on the FATF Blacklist. One of the most significant actions taken was the passing of the recent amendments to several laws, including the Companies (Amendment) Act 2022, the Partnership (Amendment) Act 2022, and the Trustees Incorporation (Amendment) Act 2022. In early 2023, the lawmakers went further and passed the Companies (Beneficial Owners) Regulations, 2023 (Beneficial Ownership Regulations). The golden thread among these amendments is the focus on beneficial ownership transparency.
The amendments require legal entities to maintain a register of beneficial owners containing “beneficial ownership information” and then notify the registrar of companies through timely filing of a beneficial ownership form at the Uganda Registration Services Bureau (URSB). The penalty for non- compliance is the refusal of the registrar to accept subsequent filings on the company file in addition to a statutory fine of UGX 500,000/=( USD 135) for every corporate officer of the company for each day the company is in default.
The spirit behind the requirement to disclose beneficial owners stems from the need to combat criminal activity that may lead to capital flight, tax evasion, corruption, money laundering, and terrorism financing and to provide transparency around the ownership and control of Ugandan legal entities. The cloak of anonymity provided by the lack of obligation to disclose the actual owners of these legal entities had created an unregulated space allowing for criminal activity to occur. The beneficial ownership requirements under the Companies (Amendment) Act 2022 and the Companies (beneficial owners) regulations 2023 are timely and commendable.
