29/03/23

SEYCHELLES: Corporate services sector reviews effects of Beneficial Ownership Act.

As published on seychellesnewsagency.com, Wednesday 29 March, 2023.

Seychelles is set to become the first offshore jurisdiction to fully implement the Beneficiary Ownership (BO) Act and comply with international standards by April.

The amendments made to the Beneficial Ownership Act in 2020 state that legal persons and legal arrangements are required to provide their Beneficial Ownership (BO) information to the Financial Intelligence Unit (FIU) through their resident agents.

The law further stipulates that in order to do so resident agents are required to register and populate the Beneficial Ownership databases as appropriate.

As the small island state is to become the "first mover", the Seychelles International Financial Services Association (SIFSA) hosted a conference to see how the implementation of the law is going as well as look at the new proposals government is planning to include.

The chairperson of SIFSA, Marco Francis, explained the process of implementing the BO Act framework over the last few months and said: "We want to see how we can make these laws easier to implement."

One of the challenges the corporate service providers have had to deal with is that following the changes in legislation, they have only had six months to implement the changes.

"The initial implementation time the government had given us for the law was very short, so it was very hectic. However we have seen that it has gone smoothly, even though there were times when the portals were down," said Francis.

Present at the meeting were the service providers and the regulators and both parties were able to bring forward their propositions on how to better implement the BO laws.

The amendment to the Seychelles BO Act is to improve the archipelago's reputation in the offshore sector.

Seychelles was added to France's blacklist of tax havens in 2020 for not having been cooperative enough on issues of fiscal transparency relating to requests for information on some French offshore entities registered in the island nation.

The 115-island archipelago in the western Indian Ocean was also included on the United States sanctions list due to links with Iran.

However, it was removed from the EU tax haven blacklist in late 2021 after a number of amendments and legislation were introduced to ensure compliance with EU standards.

Those present at the conference agreed that the reputation of the offshore sector is something that needs to be tackled collectively and such laws were the first step in doing so.

Under the BO Act in Seychelles, anyone who owns a business has to upload on the Financial Intelligence Unit (FIU) who is the owner.

One of the presentations by the regulators highlighted that countries have shifted from just being recipients to being able to question the information they are given and that having the information on hand is essential to the investigation of financial crimes.

Among the challenges pointed out was that the offshore companies based in Seychelles now have to make sure that the beneficial register is accurate.

The service providers in Seychelles will now have to have a current register that includes their clients' Tax Identification Number or National Identification Number, name, residential address, service address, date of birth and nationality.

The information will remain on their books for at least seven years after they stop being a beneficial owner.

Authorities in Seychelles will also hold inspections to ensure the laws are being followed and penalising those who do not.

The authorities have until June to revise the BO guidelines.