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Ministerial Resolution No. (4) for 2023
On the Procedures for Determining the Actual Beneficiary’s Identity
Minister of Commerce and Industry
Pursuant to:
Has decided as follows:
Definitions
Article (1)
The following words and phrases shall have the meaning indicated next to each of them:
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The Law |
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Anti-Money Laundering and Combating the Financing of Terrorism Law No. (106) of 2013. |
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Executive Regulations |
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Executive Regulations of the Anti-Money Laundering and Combating the Financing of Terrorism Law No. (106) of 2013. |
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Registrar |
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Authority responsible for supervising tradenames’ registration for various types of establishments registered in the state. |
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Concerned Authorities |
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Regulatory and competent authorities responsible for implementing any provision of the Law and the Executive Regulations. |
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Actual Beneficiary |
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Any natural person who owns or exercises final, direct or indirect control over the customer, the person on whose behalf the transaction is conducted or the natural person who exercises ultimate and actual control over a legal person or legal arrangement, as determined in Article (5) of this Resolution. |
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Nominal Management Member |
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Any natural person who acts in accordance with the directions, instructions or will of another person. |
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Senior Management |
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The decision-making authority in a legal person. |
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Actual Beneficiary Register |
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Special register for the actual beneficiaries of a legal person that includes all relevant data. |
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Partners or Shareholders Register |
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Special register for partners or shareholders in a legal person that includes all their data. |
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Testator |
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Natural or legal person who authorizes the management of his funds to a trustee according to an official or customary document. |
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Trustee |
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Natural or legal person who enjoys the rights and powers granted thereto by the testator or the trust fund, under which he undertakes the management, use and disposition of the testator’s funds in accordance with the conditions imposed thereon by either of them. |
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Trust Fund |
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Legal relationship under which the testator places funds under the control of the trustee in favor of a beneficiary or for a specific purpose. These funds are deemed independent of the trustee’s property, where the right to the trustee’s funds remains in the name of the testator or in the name of another person on behalf thereof. |
Resolution Objectives
Article (2)
This Resolutions aims to the following:
1. Contributing to developing the business environment and the state’s capabilities and economic standing, pursuant to international requirements, by regulating, at least, the minimum obligations of the Registrar and legal persons in the state, including licensure or registration procedures and organizing the Actual Beneficiary Register and the Partners or Shareholders Register.
2. Developing effective and sustainable executive and organizational mechanisms and procedures for beneficial ownership data.
Scope of Validity
Article (3)
1. The provisions of this Resolution apply to the Registrar and legal persons licensed or registered in the state.
2. Excluded from the provisions of this Resolution are companies wholly owned by the state or any other companies wholly owned by those companies.
Legal Person Licensure or Registration
Article (4)
1. The legal person shall be licensed or registered in the state, and, when applying for a license or registration, shall provide the Registrar with the following basic data:
A) Name, legal form and articles of incorporation.
B) Address of the headquarters or main premises. If the legal person is a foreigner, the name and address of its legal representative in the state shall be mentioned and evidence to that effect shall be submitted.
C) Articles of Association or any other similar documents approved by the relevant authority in the state.
D) Names of relevant persons who hold senior management positions with the legal person and their registered data based on the travel documents or civil cards, their numbers and the date of their issuance and expiration.
2. A legal person may not be licensed or registered under a name previously registered in the state or under a name that is similar to a degree that causes confusion.
3. The legal person shall refrain from using a name other than its registered name, where that name shall be followed by the legal form of the legal person. It may also apply to the Registrar to change its name. If approved, the legal person shall be prohibited from using the canceled name immediately after its cancellation, where all its letters and documents shall its new name and address is clearly in the state in a clear manner.
4. The legal person shall have a clear, detailed address registered in the state, which the Registrar shall be notified of, and on which all correspondence and notifications shall be received.
Determining the Actual Beneficiary
Article (5)
1. For the purposes of applying the provisions of this Resolution, the Actual Beneficiary of a legal person shall be any person who ultimately owns or controls a legal person, through direct or indirect ownership shares at a ratio of 25% or more of the legal person’s capital, or has the right to vote therein at a ratio of 25% or more, including retaining that ownership through a chain of ownership or control or through control by other means, such as the right to appoint or remove a majority of the members of the Board of Directors.
2. Actual Beneficiary may be traced through any number of legal persons or any arrangements of any kind.
3. In case more than one person participates in owning or controlling a percentage of the capital of a legal person, they shall all be treated as owners and controllers of that percentage.
4. If all possible means have been exhausted and a natural person with final controlling ownership has not been identified as stated in Clause (1) of this Article, or in case of doubt, then the natural person who exercises control over the legal person through other means shall be the Actual Beneficiary.
5. If no natural person is identified as stated in Clause (4) of this Article, the Actual Beneficiary shall be deemed to be the natural person holding the senior management officer position.
Transparency and Actual Beneficiary
Article (6)
1. The legal person shall take reasonable measures to obtain and maintain appropriate, accurate and up-to-date data about its beneficial owner.
2. Excluded from the application of the provision of Clause (1) of this Article are legal persons licensed or registered in the State and owned by a company listed in a regulated market that is subject to disclosure requirements that impose conditions to ensure sufficient transparency for the Actual Beneficiary or a majority-owned subsidiary of that listed company.
Notifications Related to Beneficial Owner
Article (7)
1. If it becomes evident to the legal person that there is a person who could be an Actual Beneficiary, yet his ownership details, whatever their nature, are not properly registered in the Actual Beneficiary Register, the legal person shall inquire about the status of that person as its Actual Beneficiary, and if a period of fifteen (15) days has passed From the date of the inquiry without a response, the legal person must notify the natural person that he is considered an Actual Beneficiary thereof.
2. The notification referred to in Clause (1) of this Article includes the following:
A) Evidence of the issuance of notification pursuant to this Resolution.
B) Details of the data relevant to being an Actual Beneficiary, which the legal person believes to be correct, with a request to provide any missing data required to complete the data of the Actual Beneficiary Register.
C) Requesting the notified person to undertake the following:
1. Stating whether or not he is the Actual Beneficiary of the legal person.
2. Confirming or correcting any details included in the notification.
3. Providing any missing data in the notification.
3. If the person to whom the notification is sent does not comply within fifteen (15) days from the date of receipt thereof, the legal person shall include the reported details in the Actual Beneficiary Register.
4. For the purpose of determining the identity of the Actual Beneficiary, the legal person may rely on the person’s written response to the notification, unless he has reasonable grounds to suspect that the answer is misleading or incorrect, then he shall have to register the details of the nature of ownership of that person as an Actual Beneficiary and shall notify him of the same.
Actual Beneficiary Register
Article (8)
1. The legal person shall keep the detailed data of each of its actual beneficiaries in the valid beneficiary register created thereby within sixty (60) days from the date of implementation of this Resolution or from the date of the existence of that legal person. It shall also update this register and include any change that occurs thereon within fifteen (15) days from the date it becomes aware thereof or from the date it is supposed to have known about it.
2. The Actual Beneficiary Register shall include the data of each Actual Beneficiary, as follows:
A) Full name, nationality, date and place of birth.
B) Place of residence or address to which notifications shall be sent pursuant to this Resolution.
C) Travel document or civil card number, the state, dates of issuance and expiration.
D) The basis on which he became an Actual Beneficiary of the legal person and the date on which he acquired that capacity.
E) The date on which the person ceased to be an Actual Beneficiary of the legal person.
3. In case the legal person includes the name of a natural person in the Actual Beneficiary Register in that capacity, where that natural person does not provide, by himself or with his knowledge, all data and details related thereto, the legal person shall notify him within (15) fifteen days from the date of his inclusion.
4. Any person with a capacity or interest may submit to the competent court a request to correct the Actual Beneficiary Register, in the following cases:
A) Inserting or deleting the name of any person from the Actual Beneficiary Register unjustifiably or without sufficient reason.
B) Failure to include the name of a person in the Actual Beneficiary Register.
C) Unjustified delay in including the name of a person in the Actual Beneficiary Register or deleting the name of a person who is no longer an Actual Beneficiary.
5. A legal person may not register or enforce any document related to a change in ownership therein, unless the person to whom the ownership is transferred, or his representative, submits a statement that includes whether the transfer will result in a change in the beneficial owner of the legal person, the nature of this change, where the data of the new Actual Beneficiary shall be provided and included in the register.
Nominal Management Members
Article (9)
1. The manager or board director who acts as a Nominal Management Member shall notify the legal person that he is a nominal member and shall submit all data referred to in Article (10) of this Resolution within fifteen (15) days from the date he acquires this capacity. The Nominal Management Member who acquired that capacity before the publication of this Resolution shall notify the legal person of the same within thirty (30) days from the date of its publication.
2. The Nominal Management Member shall inform the legal person of any change occurring in the data referred to in Article (10) of this Resolution within fifteen (15) days from the date of implementing that change.
3. The Nominal Management Member shall inform the legal person of the cessation of his capacity as a nominal member within fifteen (15) days from the date of cessation.
Partners or Shareholders Register
Article (10)
1. The legal person shall keep the details of each partner’s or shareholder’s data in the Partners or Shareholders Register and shall keep that Register updated and inclusive of any change that occurs therein within fifteen (15) days from the date it becomes aware of that change, provided that it shall include the following data:
A) Number of shares owned by each of them and their associated voting rights.
B) Date of acquiring the capacity of a partner or shareholder.
C) For partners or shareholders who are natural persons: full name as stated on the civil card or travel document, nationality, name, place of birth, name and address of the employer, attaching a valid true copy of the civil card or travel document.
D) For partners or shareholders who are legal persons: all data mentioned in Article (4.1) of this Resolution.
2. A legal person who has one or more partners or shareholders, who act as trustees or as Nominal Management Members, shall register their data in the Partners or Shareholders Register.
3. The Partners or Shareholders Register shall include data on the persons represented by each trustee or Nominal Management Member as stated in Article (2.2) of this Resolution.
Making Data Available to the Registrar
Article (11)
1. Within sixty (60) days from the date of implementation of this Resolution or from the date of licensure and registration of the legal person, the latter shall submit the data of the Actual Beneficiary Register and the Partners or Shareholders Register to the Registrar and shall take reasonable measures to preserve its registers from damage, loss or destruction.
2. The legal person shall provide any additional data requested by the Registrar within the period specified thereby.
3. Taking the applicable legislation into consideration, the legal person shall submit all data referred to in Article (4.1) of this Resolution to the Registrar when requesting incorporation, licensure, registration, renewal, amendment or any other actions that the Registrar deems necessary for that purpose.
4. Every legal person shall provide the Registrar with the name of a natural person residing in the state who is authorized to disclose to the Registrar all data and information required by the aforementioned Law or Executive Regulations, as well as his address, contact information and a valid copy of his travel document or civil card.
5. In case a legal person issues shares or equities in the name of persons or Management Members, it shall be obligated to disclose within fifteen (15) days the data of those shares or equities and the identity of the persons and Management Members Registrar.
6. If the legal person is in a phase of dissolution or liquidation, the liquidator shall deliver the Actual Beneficiary Register and the Partners or Shareholders Register, if any, or replicas thereof, to the Registrar within thirty (30) days from the date of his appointment.
7. The legal person, its manager, liquidator, or others concerned with its dissolution shall retain the registers and all data referred to in this Resolution for a period of at least five (5) years from the date of its dissolution, liquidation, cancellation, or other procedures that lead to end its legal existence.
Notifications Issued by the Registrar
Article (12)
1. For the Registrar to perform his duties, the legal person or any other person who has data or documents relating to the actual beneficiaries or Nominal Management Members, without prejudice to any privilege enjoyed by that person, shall be obligated to the Registrar’s request to provide or inform his employees or his authorized agents of such data or documents in accordance with a written notification to be sent to either of them at the time and place specified in the said notification.
2. The powers granted to the Registrar under Clause (1) of this Article include the following:
A) Taking copies of the documents submitted according to the circumstances deemed appropriate by the Registrar.
B) Requesting the person who is required to submit data or documents, in case they are not submitted, to indicate their location, to appear at the time and place specified by the Registrar and to answer any questions related to any matters for which data is required to be submitted.
3. Lawyers and other independent legal professionals and independent legal auditors shall be exempted from providing any data requested in the notification if they are obtained on the occasion of assessing the legal status of the legal person, defending or representing it before the judiciary, arbitration proceedings, mediation or conciliation, or on the occasion of providing a legal opinion in a matter related to judicial proceedings, including providing advice on initiating or avoiding taking such proceedings or inquiring about them, whether that data was obtained before, during or after the judicial proceedings or in other circumstances where they are subject to professional confidentiality.
Registrar's Obligations
Article (13)
The Registrar shall be obligated to the following:
1. Preparing and issuing work forms, notifications and guidance manuals related to licensure or registration procedures in the required manner that achieves effectiveness.
2. Providing appropriate human resources to enable him to carry out his work tasks effectively.
3. Automating and classifying data obtained thereby in a way that facilitates referring to them and their exchange with security authorities upon request.
4. Providing all data required in terms of the commercial register within six (6) months from the date of implementing this Resolution and any other data requested by the Ministry of Commerce and Industry or the concerned authorities.
5. Providing data on legal persons in the state and making them available to the public, as follows:
A) Description of their different types or forms and basic features, in accordance with Companies Law No. (01) of 2016.
B) Licensure or registration procedures.
C) Basic data as included in Article (4.1) of this Resolution.
D) Data related to the Actual Beneficiary.
6. Maintaining and updating the basic data mentioned in Article (4.1) of this Resolution, ensuring its accuracy and availability to the public.
7. Obtaining the data of the Actual Beneficiary when licensing or registering the legal person, keeping such fata updated and accurate.
8. Maintaining all registers submitted thereto it pursuant to Article (11.7) of this Resolution, for a period of at least five (5) years from the legal person’s expiry date through dissolution, liquidation or other procedures leading to ending its legal existence.
9. Updating the basic data included in Article (4.1) of this Resolution and the data of the Actual Beneficiary Register and the Partners or Shareholders Register on an ongoing basis, based on the data provided thereto by the legal person, providing it to the Ministry of Commerce and Industry and disclosing it based on the request of the concerned authorities.
Change of Data
Article (14)
1. The legal person shall maintain all basic data in accordance with Article (8) of this Resolution, the data of the Partners or Shareholders Register, the data of the Actual Beneficiary Register, the data of the registers associated therewith and any other data or information that may be required to keep under the applicable legislation, provided being accurate and updated.
2. The legal person shall submit any amendment or change to the data or information pursuant to this Resolution to the Registrar within fifteen (15) days from the date of the amendment or change.
Local and International Cooperation
Article (15)
1. The Ministry of Commerce and Industry shall provide the basic data included in Article (4.1) of this Resolution, data in the Actual Beneficiary Register and the Partners or Shareholders Register to the relevant authorities in the state upon request.
2. The Ministry of Commerce and Industry shall provide means of international cooperation regarding the basic data of the legal person, data in the Actual Beneficiary Register and the Partners or Shareholders Register, provided that such cooperation shall include the following:
A) Facilitating the competent foreign authorities’ access to the basic data available in the legal person’s registers upon request.
B) Exchanging data and information about partners or shareholders in any legal person.
C) Using the Ministry’s powers to obtain all data of the Actual Beneficiary on behalf of foreign counterparts.
3. The Ministry of Commerce and Industry shall supervise the quality of implementation of international cooperation operations received from other states with regard to requests to obtain basic data for legal persons and data for the Actual Beneficiary thereof, as well as requests for international cooperation in terms of knowing the whereabouts of the actual beneficiaries outside the state, pursuant to bilateral agreements, multilateral agreements or based on the principle of Reciprocity.
Penalties
Article (16)
Without prejudice to the provisions of criminal liability resulting from violations stipulated in the Law, and when any violation of the provisions of this Resolution is proven by financial institutions and designated non-financial businesses and professions, the measures and penalties stipulated in Article No. (15) of the Law shall apply.
Prohibition of Granting or Renewing a License
Article (17)
It is prohibited to grant or renew any license unless all requirements of this Resolution are met.
Resolution Publication and Enforcement
Article (18)
All concerned persons, each in his capacity, shall implement this Resolution, which shall be enforced as of 01/04/2023 and shall be published in the Official Gazette.
Mazin Saad Al-Nahedh
Minister of Commerce and Industry
Minister of Communications and Information Technology
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