Up to 500,000-dinar penalty looms for firms failing beneficiary disclosure

• Under regulatory directives, business owners must disclose the identities of individuals with beneficial ownership in the company, even if these individuals are not listed in official records, contracts, or the database of the Ministry of Commerce and Industry.

• Ministry officials stated that penalties cannot be waived, but license suspensions will be lifted for companies that promptly disclose actual beneficiary data.

• The ministry’s enforcement measures, both regulatory and punitive, aim to enhance the local business environment, strengthen state capabilities, and bolster economic integrity.

In a move reflecting strict oversight of Anti-Money Laundering Law violations, informed sources told Al-Rai newspaper that the Ministry of Commerce and Industry plans to increase financial penalties on joint-stock companies, individual enterprises, and partnerships that fail to disclose actual beneficiary data. The penalties could gradually rise to as much as 500,000 dinars.

Sources revealed that the Ministry of Commerce and Industry has already imposed a fine of 500 dinars on 147,300 joint-stock companies, individual enterprises, and partnerships, out of a total of approximately 226,915 entities—equivalent to 65% of the total covered entities.

The fines were issued for exceeding the October 28 deadline to submit actual beneficiary data, leading to the suspension of their commercial licenses.

The sources added that the ministry has now escalated its oversight by reapplying the violation at higher penalty rates, potentially reaching the maximum fine of 500,000 dinars, as stipulated in Article 15 of Law No. 106 on Combating Money Laundering and Terrorist Financing.

Under regulatory directives, business owners must disclose the identities of individuals with beneficial ownership in the company, even if these individuals are not listed in official records, contracts, or the ministry’s database. This applies whether the actual beneficiary has been previously identified in the ministry’s records or has not been disclosed at all.

The sources emphasized that suspended licenses, held by officials deemed to have concealed the true beneficiaries—whether intentionally or not—will remain inactive until the required data is submitted.

Meanwhile, financial penalties will continue to escalate, potentially reaching the maximum limit. After the supervisory deadline passed, several company representatives approached the ministry, requesting exceptions to the 500-dinar fine.

However, ministry officials confirmed that waiving the penalty is not permitted. Companies that promptly comply with directives to amend their status and disclose actual beneficiary data will have the suspension on their licenses lifted. This restriction currently prevents affected entities from conducting transactions requiring ministry approval.

The ministry’s enforcement measures, both regulatory and punitive, aim to enhance the local business environment, strengthen state capabilities, and bolster economic integrity. These actions align with international recommendations, particularly from the Financial Action Task Force (FATF), to improve efforts in combating money laundering and terrorist financing and to address exploitable gaps, adhering to binding global standards.

Notably, individual enterprises showed the lowest compliance, with 50,320 out of 63,759 institutions (79%) failing to register actual beneficiary data within the specified deadline.

By contrast, joint-stock companies were the most compliant, with 955 out of 1,703 entities submitting the required data. Partnerships, however, reported compliance for 65,179 entities out of 161,453, leaving 96,274 companies—or 60%—non-compliant.