By: Nghiinomenwa Erastus
The Financial Intelligence Centre has issued a directive to the Master of High Court to de-register all kinds of trusts that are not complying with the Financial Intelligence Act.
In a directive issued in September this year, the intelligence centre said their move was warranted by the emerging evidence that trusts are becoming vehicles for financial crimes.
The trusts are being used for money laundering and financing of terrorism and proliferation financing (ML/TF/PF).
“The rationale behind this section stems from the fact that trusts have been identified internationally as a popular vehicle for ML/TF/PF activities,” the directive read.
Due to the new findings, the Financial Intelligence Centre (FIC), as part of its efforts to assist the government in preventing and combatting (ML/TF/PF), summon the Master of the High Court to act on trusts.
FIC directed the Master of the High Court to register all testamentary and inter vivos trusts as prescribed by the Financial Intelligence Act (FIA).
A trust created while an individual is still alive is an inter vivos trust, while one established upon the individual’s death is a testamentary trust.
The directive ordered the Master to collect and keep up-to-date information regarding the founder, each trustee, each income beneficiary, and each beneficial owner of all registered testamentary and inter vivos trusts.
The Master was also warned, “not to register any trust without the information mentioned earlier being available to him/her”.
FIA requires the Master to open and keep a register of prescribed up-to-date information on all trusts to identify all-natural and legal persons associated with that trust.
“For purposes of effectively preventing trusts from being abused for ML/TF/PF purposes, it is important to identify and keep up-to-date records of any natural or legal person that is connected to or stands to benefit from that registered trust,” the directive explained.
The Master of the High Court is directed to de-register any trust if it cannot obtain the information required.
Before de-registration is affected, the Master must give all-natural or legal persons with the trust reasonable notice in writing.
In writing, it should highlight the non-compliance with the requirements of the FIA and the intention to de-register the trust and the consequences.
The person on behalf of the trust may, in writing, within a period specified in the notice, make representations as to why the de-registration should not occur.
Suppose a trust refuses or fails to register and provide the information needed as prescribed within the period determined under the subsection. In that case, the trust commits an offence and is liable to a fine not exceeding N$10 million.
If the offence is attributable to a representative of the trust, to such fine or imprisonment not exceeding 10 years, or to both such fine and such imprisonment, the FIA act highlighted.
While non-compliance with the directive and specifications contained constitutes a criminal offence.
Upon conviction, an offender may be imposed a fine not exceeding (N$100 million or to imprisonment for a period not exceeding 30 years, or to both such fine and such imprisonment. Email: email@example.com