A new report calls on Rwandan government to amend company laws to ensure that Beneficial Ownership (BO) information is up-to-date and easily accessible to competent authorities.
The report takes a closer look at the recently introduced BO provisions, contextualizing Rwanda’s framework within the wider international approaches to BO. The report identifies the areas in which the laws fall short and suggests potential improvements that could be made to strengthen the effectiveness of the provisions.
The report co-authored by TJNA’s Policy Associate Everlyn Muendo and Mwaniki Maina a Researcher at the Committee on Fiscal Studies (CFS) at the University of Nairobi (UoN) and an advocate of the High Court of Kenya presents its discoveries and proposals regarding the issue of beneficial ownership in the Kigali International Financial Centre.
“While the enactment of BO laws is highly commendable, in order to make them truly effective it is absolutely necessary for Rwanda to ensure that in practice, competent authorities have timely access to BO information. This will be by increasing the scope of their powers of access, through written laws such as the Company Laws and AML laws or by creating a centralised database through streamlining with the Registrar General’s office,” the report stated.
“Further, consideration of risks such as the setting up of an IFC and the introduction of new corporate
structures should be considered in further formulating and implementing BO laws. A risk assessment should be carried out in order to identify these vulnerabilities and amendments made accordingly,” it said by indicating that BO information is important because it helps remove the veil of secrecy and opaqueness that individuals utilise to cover their illicit or criminal financial activities.
The report recommended that the Rwandan Parliament must amend the Company Laws to include a definition of beneficial owners, ensuring that only natural persons/individuals shall constitute beneficial
owners. “This will help effectively encourage financial transparency in the ownership of companies,” it said.
“The Rwandan Parliament must amend the Company Laws to include a wider array or required BO information such as, beneficial owners must disclose if they are using nominee shareholders or directors to control their interests in the company so that not only are the beneficial owners disclosed but also reveals how they exercise control,” the report said.
“To ensure timely access of BO information by competent authorities, Rwanda should adopt the approach of establishing and maintaining n up-to-date registry of BO information with the Company Registrar or other appropriate authorities. This registry should not only be made available to the competent authorities but be publicly accessible to further enhance financial transparency,” the report recommended.