Beneficial Ownership Research Articles

Final Danish Decision on Beneficial Ownership with Respect to Dividends Following the ECJ Decision in the “Danish Cases”

This note describes the Danish Supreme Court’s final decision in the beneficial ownership cases with respect to dividends in response to the ECJ’s 2019 decisions in Skatteministeriet v. T Danmark (Case C-116/16) and Skatteministeriet v. Y Denmark (Case C-117/16).

The abuse of the beneficial ownership of trusts to conceal assets in insolvency and divorce proceedings: a South African study

PurposePrevious research has indicated that trusts are used to commit various economic crimes, but limited studies examine the exact method of how trusts are abused. This paper aims to determine how trusts are abused to conceal assets in insolvency and divorce proceedings. Apart from discussing how fraudulent trusts are evaluated by South African courts, two court cases will also be analysed to determine how trusts have been abused in the past to conceal assets in insolvency and divorce proceedings.Design/methodology/approachThe methodology used is a literature study, predominantly using court cases and relevant statutes as the primary sources of information. The difference between a sham and alter ego trust is discussed, whereafter two court cases are dissected to identify how trusts have been abused to conceal assets.FindingsThe study found that trusts can be abused in different ways to conceal assets in insolvency and divorce proceedings. This can vary from the way the trust is established to the way the trust is used. But trusts are particularly susceptible to abuse when there is no separation between the ownership and enjoyment of trust assets, and the trust lacks independent trustees.Originality/valueThe research finding can be used to better understand how trusts are abused in divorce and insolvency proceedings.

BENEFICIAL OWNERSHIP TRANSPARENCY IN LAW ENFORCEMENT OF MONEY LAUNDERING ACT INVOLVING CORPORATIONS

Corporations have an important role in economic growth and national development. In corporate practice, there are times when committing criminal acts of money laundering that have a detrimental impact on the state and society. The corporation has the potential to become a means to commit criminal acts of money laundering with the aim of benefiting (beneficial owner). Thedistribution of beneficial owner information is an effort to realize corporate sustainability. Consistency of beneficial ownership transparency is needed to ensure law enforcement of money laundering crimes involving corporations. The purpose of this study is to find the role of beneficial owners in the misuse of corporations as a medium for money laundering crimes in Indonesia. This research method uses a normative juridical approach that focuses on data collection techniques in the form of secondary data which is also supported by interviews. The research specifications are descriptive analytical, with literature studies and field studies being the research stage, then the data is analyzed qualitatively. The results of the analysis show that the position of beneficial owners in the corporation can in practice control the corporation to carry out money laundering actions, which then the proceeds from the money laundering are enjoyed by the beneficial owner. Transparency of beneficial owner information is part of the framework of the principles of prevention and eradication of money laundering. Transparency of beneficial owner information can ensure the implementation of practices and concept development that is used as a means of orientation in the prevention and eradication of money laundering crimes involving corporations.

Criminal Law Policies in an Effort to Tackle Criminal Acts of Terrorism Financing

The issues that will be discussed in this research include what are. This research was initiated by the development of terrorist groups that request donations from individuals or groups or foundations, or corporations. Likewise, this writing aims to prevent the collection of funds to finance terrorist activities using corporations. Identifying Beneficial Owners of Corporations is very important in preventing criminal acts of terrorism financing. This article uses normative legal research methods. The sources of legal materials used are primary legal materials and secondary legal materials. The procedure for collecting legal materials in this article is to study library materials. Analysis of legal material sources was carried out descriptively. Empowering in its concretization, legal products related to terrorism funding need to be harmonized and renewed. Because of this, the existing law should be updated to suit developments and the modus operandi of terrorist organizations in raising funds so that the abuse of corporations as a vehicle for committing criminal acts of terrorism funding can be prevented and eradicated.How to cite item: Amrullah, M. Arief, “Legal Problems Related to Mineral and Coal Mining Permits.” Jurnal Cakrawala Hukum 14 no. 1 (2023): 86-95. DOI: 10.26905/idjch.v14i1.9881.

Russian Anti-Offshore Policy: Current Regulation and Perspectives

The paper outlines the regulatory landscape of an anti-offshore policy in Russia. In the first part of this paper, the author gives an overview of effective regulations against offshore businesses that Russia has adopted in the past decade. The CFC rules were developed and subsequently passed because of Russia’s participation in the BEPS project. They are of the highest importance for the implementation of the anti-offshore policy. Other measures include transfer-pricing rules, registers of beneficial owners, exchange of financial information and revision of double tax treaties with Cyprus, the Netherlands, Luxembourg and Switzerland. Sanctions imposed by the EU, the USA, the UK and their allies against Russia, Russian individuals and companies in 2022 and counter-measures against Western countries and their residents introduced by Russian authorities also stimulate deoffshorization of the Russian economy. They have limited the free movement of capital between offshore holding companies and their Russian subsidiaries and, consequently, have contributed to the isolation of the Russian economy from the rest of the world, including its offshore infrastructure. The second part of the paper deals with the proposals for the Russian anti-offshore policy. The author shares his ideas on how to make the policy for deoffshorization of the Russian economy more effective. A few of these anti-offshore actions have already been implemented in draft laws and are currently being considered in the Russian Parliament. All of the measures that are being considered would result in unfavourable tax implications and possible damage to the reputations of those Russian individuals and organizations who still use offshore companies and trusts for the purposes of minimizing taxation and maintaining anonymity. The most important action proposed by the author for the implementation of the anti-offshore policy is the forced deoffshorization of strategic enterprises. Passing the relevant law would entail fundamental changes to the Russian business environment and result in the restoration of economic sovereignty over the Russian economy.

The Limits of Analogy in the Private Legal Status of the Beneficial Owner of a Legal Entity

The author reveals the inconsistency of judicial practice on the issue of the private legal status of beneficial owners (final beneficiaries, beneficiaries) of a legal entity: in cases of challenging decisions of general meetings of participants and transactions of such legal entities, courts without proper references to the legal basis tend to recognize the beneficiaries of the right to appropriate claims, and in disputes over their demands for information the activities of the corporate entities actually controlled by them are denied on the grounds of the lack of grounds for applying the analogy of the law, considering the silence of the legislator about the relevant protective instrument of the beneficiary qualified. Due to the absence of special rules on the presence or absence of analyzed protective capabilities of beneficial owners, the effectiveness of analogy as a traditional means of overcoming legal gaps has been tested. The prospects of the analogical introduction of the public-law concept of "beneficial owner" into the structure of the private-law status of legal entities are evaluated. The development of a formal approach based on the absence of a direct legal connection of the beneficiary with the organization controlled by them is not excluded. It is concluded that it is necessary to develop a unified judicial approach to the possibility of an analogical application of public-law rules on the figure of beneficial owners to private-law relations with their indirect participation before the legislative solution of the issue under study.

In search of the owner: Regulating through transparency

It has been argued that obscurity in ownership structures has created an opportunity for illegal activities, such as tax evasion, money laundering, and corruption, to go unnoticed. We examine the impact of international transparency initiatives on practitioners and the regulatory landscape in the national context of Seychelles. This article shows how the ambiguities and undesirable effects surrounding transparency become not an exception but, rather, a rule, a necessary and inescapable necessity of the pursuit of visibility. In particular, we explore the transparency of beneficial ownership standards which aim to eliminate the difficulty, if not impossibility, of tracing assets and financial flows to the actual owners. Using theoretical insights of Deleuze, we investigate the engagement with beneficial ownership transparency standards, and the transformative capabilities of transparency in the national setting. We substantiate our argument empirically through a single case study of Seychelles, informed by semi-structured interviews and documentary material, which has benefitted from an in-depth understanding of the setting as an international financial centre.

Economic and Political Risk Aversions to Illicit Financial Flows: A Rethink of the Portfolio Choice Factors

The study examines the long-term causal relationship between public debt, governance quality, and illicit financial flows in sub-Saharan Africa. Annual time series data were gathered from the World Bank Governance Indicators, International Monetary Fund Economic Outlook, and Global Financial Integrity from 2005 to 2014. The approach adopted in the study is in the tradition of the portfolio choice framework of tax evasion, rooted in the investment theory of capital flight. The study finds that there is a negative and statistically significant long-run relationship between governance quality and illicit financial flows. The results also show a negative and statistically insignificant relationship between public debt and illicit financial flows. The findings suggest that weak institutional oversight, poor regulatory quality, corruption, and political crises are important determinants of illicit financial outflows in the region. It concludes that governments need to improve the transparency of financial transactions, including the beneficial ownership of corporate structures and tax information. The results also indicate the need to strengthen institutions such as customs, anti-corruption, and other law enforcement agencies to detect intentional trade misinvoicing as tax evaders exploit loopholes in tax administration peculiar to developing countries. The study is timely as resources are critically needed to rebuild economies in view of the global COVID-19 outbreak and its deleterious effects on low-income countries. The study is also relevant for policymakers as it presents pointers to the factors that proliferate illicit capital outflows from the region.

Reconciling transparency and privacy through the European Digital Identity

Where lies the balance between privacy and transparency? It is an everlasting question, that lied at the heart of the recent judgement of the Court of Justice of the European Union (CJEU). The case concerned the Ultimate Beneficial Ownership registry which contains the information of who has a financial interest in companies. The registry was open to the public. The wide accessibility aimed to increase transparency and thereby prevent money laundering and the financing of terrorism (MLFT). The registry was open to public access and the question to the CJEU was whether the accessibility was lawful. The judgement of the CJEU declared the wide accessibility to be unlawful. The judgement acknowledges the importance of the concept of transparency but nevertheless considers the public access to be unproportionate. Leaving the question of how to balance transparency with privacy. The answer can be found in redesigning the European electronic Identity. This case-note will first discuss the facts of the case in section 2. The note will then continue by summarizing the opinion of the Advocate General in section 3. In section 4 the note will summarize the judgement of the CJEU. The case note will end in section 5 with an analysis of the impact of the case in relation to developing a digital European Identity.

Beneficial Ownership in International Taxation and Biosemantics – Why a Redundant, Paradoxical and Harmful Concept Can Be a Potent Weapon in the Hands of the Tax Authorities

This article argues that the concept of beneficial ownership supports an income allocation function more than an anti-abuse one. It then demonstrates that the concept is redundant, paradoxical and harmful, and that it would be better to discard it. Finally, the article uses biosemantics to explain the concept.

Criminal liability of the auditor for abuse of authority

The paper is devoted to determining the grounds for bringing the auditor to criminal liability for abuse of authority. The Criminal Code of Ukraine provides for liability for abuse of authority by persons who provide public services. It is a crime to abuse one's powers by an auditor for the purpose of obtaining an illegal benefit, if this caused significant damage to the legally protected rights or interests of individual citizens, state or public interests, or the interests of legal entities. The guilty person shall be punished in the form of a fine from two thousand to four thousand non-taxable minimum incomes of citizens or restriction of liberty for a term of up to three years, or deprivation of liberty for the same term with deprivation of the right to hold certain positions or engage in certain activities for a term of up to ten years. Public danger of the act provided for in Part 1 of Art. 365-2 of the Criminal Code, due to the fact that abuse of authority by the auditor violates the established procedure for carrying out professional activities related to the provision of public services. Criminal liability for inaction arises under the conditions, if the auditor in a specific situation was obliged to perform a certain action and could perform it, however, failed to do so, for example failed to verify the details of the ultimate beneficial owner of the legal entity during customer due diligence. Abuse of authority is punishable as a criminal offense if it was committed for the purpose of obtaining an unlawful benefit and caused significant damage. Specific forms of abuse of powers by the auditor may be different and depend on the content of the granted powers and the scope of their application. The auditor's legitimate exercise of his powers excludes criminal liability.

REGULATION OF BENEFICIAL OWNERSHIP IN SOUTH AFRICA AND ZIMBABWE

Criminals despise transparency. Beneficial ownership transparency measures are aimed at ensuring that the structure of corporate vehicles is evident and that their real owners do not hide behind the corporate veil. South Africa and Zimbabwe have been struggling to prevent and combat money laundering, corruption and tax crimes. Competent authorities in both countries are starting to appreciate the importance of beneficial ownership transparency measures in the fight against economic crime. This paper examines whether South Africa and Zimbabwe have made progress in establishing effective legal frameworks on the beneficial ownership of legal persons and legal arrangements. It discusses the Financial Intelligence Centre Amendment Act 1 of 2017 which establishes beneficial ownership transparency measures for South Africa. It goes on to discuss the Zimbabwean situation regarding beneficial ownership and its regulation. Lastly, it makes certain recommendations concerning the beneficial ownership regimes of both countries.

Swiss estates and (offshore) trusts: information gathering—recent Swiss case law

Abstract Trustees, foundations, banks, asset managers or tax advisors are often confronted with information requests from heirs of a Swiss estate. In this article, the author provides an overview of the heirs’ rights to information under Swiss contract law and Swiss succession law. She then focuses on a recent decision of the Swiss Federal Supreme Court (case 5A_30/2020), which addresses a claim for information by an executor against a financial institution in possession of trust information. The Swiss Supreme Court clarified in this decision on which basis an heir or an executor of a Swiss estate may lodge an information claim against a Swiss bank with regard to trust accounts or similar financial institutions holding financial information, of which the deceased was not the legal owner but only the beneficial owner.

“Beneficial owner” and “beneficial ownership” in South African trust law: troublesome aspects of the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act 22 of 2022

Die Wysigingswet op Algemene Wette (Teengeldwassery en Bekamping van Terrorismefinansiering) 22 van 2022 is op 29 Desember 2022 bekragtig. Dié wet wysig, met 1 April 2023 as die inwerkingtredingsdatum van al hierdie wysigings, die Wet op die Beheer oor Trustgoed 57 van 1988 in verskeie opsigte. In hierdie bydrae neem ons twee wysigings onder die loep, naamlik die invoeging van ’n definisie van “uiteindelik geregtigde” (“beneficial owner”) in artikel 1 van Wet 57 van 1988 asook die vaslegging van die idee van “uiteindelike geregtigheid” (“beneficial ownership”) in artikel 11A van daardie wet. Ons voer aan dat beide toevoegings onvanpas is in die Suid-Afrikaanse trustreg aangesien dit nie strook met meerdere van die grondbeginsels van die Suid-Afrikaanse trustreg nie. Ons wys in die besonder daarop dat die wetgewer se gebruik van “uiteindelik geregtigde” en “uiteindelike geregtigheid”: (i) onder inhoudelike onsekerheid gebuk gaan; (ii) nie strook met sommige van Wet 57 van 1988 se bepalings nie, by uitstek die definisie van “trust” in artikel 1 en ’n trustee se sorgplig ingevolge artikel 9; (iii) oënskynlik berus op ’n mistasting oor die regsaard van ’n trust asook die aanvaarde regsbeginsels rakende die misbruik van die trustvorm en skyntrusts en (iv) die gevaar inhou van die voortydige verkryging van regte deur trustbegunstigdes. Ons argumenteer derhalwe dat die wetgewer se gebruik van “uiteindelik geregtigde” en “uiteindelike geregtigheid” in die wysigingswet en Wet 57 van 1988 teoretiese en praktiese onsekerhede skep wat nie alleen die begripsmatige onderbou en samehang van die Suid-Afrikaanse trustreg skaad nie, maar ook dermate uit pas is met sommige van die bestaande wet se bepalings dat hierdie wysigings bykans onmoontlike verpligtinge ten opsigte van die insameling, vaslegging en verslagdoening van inligting (ter nakoming van die – weliswaar prysenswaardige – oogmerke van die wysigingswet) op trustees plaas. Ten einde hierdie kwessies aan te spreek, doen ons ’n alternatiewe – en onses insiens werkbare – wetsbepaling aan die hand wat, alhoewel dit grootliks op die bestaande bewoording van die tersake bepalings van die wysigingswet gegrond is, wegdoen met “uiteindelik geregtigde” en “uiteindelike geregtigheid” terwyl dit steeds uitvoering aan die oogmerke van die wysigingswet gee. Die voorgestelde wetsbepaling spreek in die besonder die problematiek aan met betrekking tot die besit van of doelmatige beheer oor trustbates – wat sentraal tot die idee van ’n “uiteindelik geregtigde” staan. Dit beperk die voorskrifte oor die besit van of doelmatige beheer oor trustbates tot gevalle waarin trustees sinvolle uitvoering aan die tersake wetsbepaling kan gee.

Article: Economic Substance for Holding Companies in the Post- BEPS World and after Recent ECJ Case-Law: An Analysis of Developments in Europe

Over the last decade, following the Base Erosion and Profit Shifting project (BEPS), the international tax framework has been in constant change. Some of those changes, such as the introduction of the Principal Purpose Test (PPT) in the Organization for Economic Co-operation and Development (OECD) Model Convention and the Anti-Tax Avoidance Directive (ATAD I and II) in the European Union (EU) aim at denying benefits to corporate structures and transactions put in place by Multinational Corporations (MNEs) whenever those are deemed to be abusive. Recent European Court of Justice (ECJ) judgments arguably further modified the international tax framework. One of the most important elements – following those developments – commonly analysed to assess abuse is ‘economic substance’. This article focuses on the analysis of substance requirements particularly for holding companies, which typically are less robust than those of companies generating active income. After analysing the definition and object of a holding company, the author explores the current views of the OECD and the EU on this topic, including ECJ jurisprudence, to assess to what extent those have converged. The article compares different instruments and concepts, as well as their underlying principles, aiming at applying them to specific cases of cross-border holding structures. Holding companies, substance, anti-tax avoidance directive (ATAD), principle purpose test (PPT), abuse of rights, tax treaty abuse, principal purpose test (PPT), general anti-avoidance rule (GAAR), beneficial ownership

Legality of access for any member of the general public to the information on beneficial ownership: case of Latvia

Legality of access for any member of the general public to the information on beneficial ownership: case of Latvia

Beneficial ownership transparency strategy in law enforcement of the money laundering act involving corporations

Corporations play an important role in economic growth and national development. The corporation has the potential to become a means to commit criminal acts of money laundering with the aim of benefiting (beneficial owner). The distribution of beneficial owner information is an effort to realize corporate sustainability. Consistency of beneficial ownership transparency is needed to ensure law enforcement of money laundering crimes involving corporations. The purpose of this study is to find the role of beneficial owners in the misuse of corporations as a mediator for money laundering crimes in Indonesia. This research method uses a normative juridical approach that focuses on data collection techniques, descriptive, and analytical, with literature studies and field studies being the research stage, then the data is analyzed qualitatively. The results of the analysis show that transparency of beneficial owner information is part of the framework of the principles of prevention and eradication of money laundering. Transparency of beneficial owner information can ensure the implementation of practices and concept development that is used as a means of orientation in the prevention and eradication of money laundering crimes involving corporations.

Enfeoffment to Use, Legalism, and Humanism in Gower's Mirour de l'Omme

Enfeoffment to Use, Legalism, and Humanism in Gower's <i>Mirour de l'Omme</i>

Beneficial Ownership Transparency in Africa in 2022

Beneficial Ownership Transparency in Africa in 2022

Uses and Purposes of Beneficial Ownership Data

Uses and Purposes of Beneficial Ownership Data