Companies Act Amended to Strengthen Anti-Money Laundering Efforts

To strengthen Jamaica’s anti-money laundering and counter financing of terrorism efforts, the Government has approved several changes to the Companies Act.

The amendments, which were approved on March 31, 2023, have been made based on recommendations from the Financial Action Task Force (FATF), in relation to ‘Beneficial Ownership’ information.

This follows the first amendment that was made to this Section of the Act in 2017 to include the requirement for beneficial ownership (BO) information from companies limited by shares.

Addressing a Jamaica Information Service (JIS) Think Tank on Tuesday, April 25, Registrar of Companies and Acting Chief Executive Officer (CEO) at the Companies Office of Jamaica (COJ), Shellie Leon, explained that a further revision was made for the beneficial ownership regime to be more extensive.

“The Companies Act had been amended in 2017; however, after assessment by the FATF and the Caribbean Financial Action Task Force, it was determined that these amendments were not adequate,” she said.

She pointed out that “prior to April 1, 2023, only profit-making companies were obliged to declare who their beneficial owner is”.

However, upon review of this requirement, the FATF determined that all companies, whether profit or non-profit, are obligated to state their beneficial owners.

A beneficial owner, as outlined by the COJ, refers to the natural person (that is, the real, living person) who ultimately owns or controls a company.

The changes also include the BO threshold being lowered from 50 per cent to 25 per cent for companies with shares, new powers of the Registrar/COJ to verify BO information through investigation and inspection, and BO information not being publicly accessible, among others.

Citing the additional third-party benefits that the lowering of the BO threshold will bring, the Acting CEO outlined that the COJ will no longer collect the Annual Return Penalty outlined under Section 121 of the Act.

“Instead, when Annual Returns are late, only a late filing fee will be levied,” she said.

In addition to that, Ms. Leon informed that “we had received concerns regarding the beneficial ownership information being available publicly”.

“Since the amendments, this information will be available privately to certain named individuals,” she noted.

These include competent authorities, the Commissioner of Customs and the Commissioner of Taxes, among others.

Apart from the country’s anti-money laundering and counter finance terrorism efforts being strengthened, there are several benefits for local businesses, especially those in the micro, small and medium-sized enterprises.

These businesses will be offered greater opportunities for international trade and financial inclusion.

These overall amendments saw the COJ partnering with local and international stakeholders embarking on a project to revise the current beneficial ownership requirements in the Act.

Further provisions were also made to ensure that the beneficial ownership regime meets international standards set by the FATF.