Legal Update – 28 March 2024
Trustees’ Beneficial Ownership Rules Issued
- Trustees to disclose BO information
- Trustees’ BO register to be maintained
- Competent authorities’ access to BO information guaranteed
- Penalty for non-compliance stipulated
On 29 February 2024, the Minister for Constitutional and Legal Affairs issued procedures for submission of information of Beneficial Ownership (BO) vide the Trustees’ Incorporation (Transparency of Beneficial Ownership) Rules 2024, GN No. 139A of 2024 (the Rules).
The Rules impose a mandatory obligations to ordinary or professional trustees to obtain and hold adequate, accurate, and current information regarding the identity of the settlor, the trustee, if any, the beneficiaries and any other natural person exercising ultimate effective control over the trust; and basic person or entity information on other regulated agents of, and service providers to, the trust, including investment advisors or managers, accountants, and tax advisors.
Further to the above, the Trustee is obliged to submit accurate and adequate particulars of the settlor, beneficiaries and beneficial owners of the trust to the Administrator General through Form No. 1A, 1B, and 1C as prescribed in the Rules.
Moreover, the Rules expressly oblige trustees to make available to the competent authorities information regarding BO and control of the trust; the residence of the trustees; and any assets held or managed by the reporting person or any other person in relation to any trustees with which they have a business relationship, or for which they undertake an occasional transaction. The said competent authorities, for BO purposes, are authorities with designated responsibilities for combating money laundering and terrorist financing; authorities responsible for investigation and prosecution of offences related to money laundering and terrorist financing; the Tanzania Revenue Authority; the Financial Intelligence Unit; and Government institutions responsible for overseeing or implementing economic empowerment of the Tanzanian nationals pursuant to the respective laws.
In tandem with the duty to disclose information, the Rules impose restrictions to the trustees against disclosure and use of BO information. Rule 6, for example, restricts disclosure and use of BO information except when it is for communication with the respective BO; compliance with the requirement of the law or Court order; or adherence to the instructions given by the BO himself. Moreover, the Rules, vide rule 8, impose an obligation on the Administrator General or any other officer to treat BO information with strict confidentiality at all times, including when in employment relationship with RITA and even after cessation of such relationship.
In so far as default in complying with BO disclosure requirements is concerned, the Rules provide a punishment of not less than TZS 100,000 but not exceeding TZS 200,000.
To read the Trustees’ Incorporation (Transparency of Beneficial Ownership) Rules, 2024 click here