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Beneficial Ownership Act 2017

REPUBLIC OF NAURU

BENEFICIAL OWNERSHIP ACT 2017
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No. 36 of 2017
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An Act to make provision for implementing the obligations of the Republic for the reporting of beneficial ownership of certain legal entities and for related purposes

Certified: 21^st December 2017

Table of Contents

PART 1 – PRELIMINARY
1 SHORT TITLE
2 COMMENCEMENT
3 DEFINITIONS
4 APPLICATION OF THE ACT
5 MEANING OF BENEFICIAL OWNER
6 LEGAL ENTITIES TO WHICH THIS ACT APPLIES

PART 2 – NOMINATED OFFICER TO MAINTAIN BENEFICIAL OWNERSHIP INFORMATION

Division 1 – Nominated Officer
7 REQUIREMENT TO HAVE A NOMINATED OFFICER
8 NOTICE OF APPOINTMENT OF NOMINATED OFFICER
9 REGISTER OF NOMINATED OFFICER

Division 2 – Required Details
10 DUTY OF LEGAL OWNERS
11 DUTY OF BENEFICIAL OWNERS AND INTERMEDIATE OWNERS TO ASSIST
12 REQUIRED DETAILS
13 CHANGES TO REQUIRED DETAILS
14 PRESERVATION OF REQUIRED DETAILS AND VERIFYING INFORMATION
15 FURTHER CONSEQUENCES OF FAILURE TO DISCLOSE BENEFICIAL OWNERSHIP

Division 3 – Disclosure Notices
16 DISCLOSURE OF BENEFICIAL OWNERSHIP INFORMATION BY NOMINATED OFFICER
17 RESTRICTIONS ON FURTHER DISCLOSURE OF INFORMATION PROVIDED BY NOMINATED OFFICER
18 DISCLOSURE OF INFORMATION OBTAINED FROM A NOMINATED OFFICER BY THE FINANCIAL INTELLIGENCE UNIT WHEN RESPONDING TO EXTERNAL REQUESTS
19 OFFENCE FOR TIPPING OFF RESULTING FROM ISSUE OF A NOTICE BY AN AUTHORITY

PART 3 – DATABASE OF BENEFICIAL OWNERSHIP
20 THE DATABASE
21 COMPULSORY SUBMISSION OF REGISTRABLE BENEFICIAL OWNERSHIP INFORMATION TO THE AUTHORITY
22 VOLUNTARY SUBMISSION OF NON-REGISTRABLE BENEFICIAL OWNERSHIP INFORMATION
23 BENEFICIAL OWNERSHIP INFORMATION TO BE SUBMITTED
24 ACCESS TO THE DATABASE
25 MODE OF ACCESS
26 AUTHORITY NOT LIABLE FOR ACCURACY OF INFORMATION SUBMITTED
27 PERSONS WHO MAY ACCESS THE DATABASE
28 DISCLOSURE OF BENEFICIAL OWNERSHIP INFORMATION BY NOMINATED OFFICER
29 RESTRICTIONS ON FURTHER DISCLOSURE OF INFORMATION ACCESSED FROM THE DATABASE
30 DISCLOSURE OF INFORMATION FROM THE DATABASE BY THE FINANCIAL INTELLIGENCE UNIT WHEN RESPONDING TO EXTERNAL REQUESTS
31 OFFENCE FOR TIPPING OFF RESULTING FROM ACCESS TO THE DATABASE

PART 4 – GENERAL

Division 1 – General
32 OVERSIGHT FUNCTIONS OF THE AUTHORITY
33 STRIKING OFF
34 REGULATIONS AND ORDERS
35 FEES
36 APPEALS
37 OFFENCES BY LEGAL ENTITIES OTHER THAN NATURAL PERSONS
38 CONFIDENTIALITY
39 PRIVILEGED INFORMATION
40 OTHER PROVISIONS CONCERNING BENEFICIAL OWNERSHIP NOT AFFECTED
41 OTHER DISCLOSURE PROVISIONS NOT AFFECTED

Division 2 – Compliance Provisions
42 STATEMENT OF COMPLIANCE IN ANNUAL RETURNS
43 COMPULSORY SUBMISSION OF ANNUAL RETURNS FOR CORPORATIONS

SCHEDULE

Enacted by the Parliament of the Republic as follows:

PART 1 – PRELIMINARY

1 Short title

This Act may be cited as the Beneficial Ownership Act 2017.

2 Commencement

This Act commences upon certification by the Speaker.

3 Definitions

(1) In this Act:

‘annual return’ means:

(a) in relation to a corporation, the annual return required by section 133 of the Corporations Act 1972;

(b) in relation to a partnership with legal personality to which the Partnership Act of 1976 applies, the supply of information at the time of:

(i) the Registration of Partnership under the Business Names Act 1976; and/or

(ii) renewal of annual Business Licence under the Business Licence Act 2017

(c) in relation to a Trust, the annual return(s) required by the current Commonwealth Trust legislation and Nauru Revenue Office and any future Trust legislation reporting requirements of the Republic;

‘Authority’ means the Secretary of Justice and Border Control;

‘beneficial owner’ as defined in section 5;

‘beneficial ownership’ as defined in section 5;

‘beneficial ownership information sharing agreement’ means exchanges under the Multilateral Convention;

‘control’ is to be construed in accordance with section 5;

‘Court’ means the Supreme Court;

‘Corporations Act’ means the Corporations Act 1972;

‘Database’ means the database established in accordance with section 20;

‘external intelligence or law enforcement agency’ means a person or body:

(a) engaged in a country which is a party to a beneficial ownership information sharing agreement; and

(b) named, referred to or contemplated in that agreement as a person or body to whom beneficial ownership information may be disclosed;

‘information’ includes any underlying records, information, fact, statement or record in any form;

‘intermediate owner’ has the meaning given by section 11(1);

‘legal entity’ means a body corporate, firm or other body that is a legal person under the law by which it is governed and references throughout the Act to legal entities under section 6(1);

‘owner’ means, in relation to a legal entity refers to a person both natural and legal who directly owns or controls shares or voting rights or other ownership interest in that legal entity or who exercises direct control through other means whether that person is also the beneficial owner of that interest;

‘nominated officer’ means a person appointed in accordance with section 8;

‘Partnership Act’ means the Partnership Act 1976;

‘permitted purpose’:

(a) means:

(i) the prevention, detection, investigation or prosecution of criminal offences, whether in the Republic or elsewhere;

(ii) the prevention, detection, investigation of or the bringing of proceedings for conduct for which including civil and regulatory penalties as are provided under the laws of the Republic or of any country outside the Republic;

(iii) the furtherance or discharge of any function under this Act or any other enactment of the authority seeking access to beneficial ownership information; or

(iv) in the case of the Financial Intelligence Unit in addition to the permitted purposes specified in subparagraphs (i) to (iii), the disclosure of beneficial ownership information to an external intelligence or law enforcement agency in accordance with a beneficial ownership information sharing agreement and includes measures taken to:

(i) determine whether to investigate, prosecute or bring proceedings;

(ii) initiate or end such an investigation, prosecution or proceedings; and

(iii) trace, freeze, seize, confiscate or recover assets;

‘registrable beneficial owner’ means a beneficial owner who, whether directly or indirectly owns or controls more than 25% of the beneficial ownership of a legal entity to which this Act applies;

‘relevant change’ means any change to the required details set out in section 12 that is provided to a nominated officer under section 13(3);

‘relevant person’ has the meaning given by section 32(2);

‘required details’ has the meaning given by section 12.

(2) The Cabinet may by regulations amend subsection (1) including the definitions of:

(a) ‘beneficial ownership information sharing agreement’; and
(b) ‘registrable beneficial owner’ including the percentage referred to within that definition.

4 Application of the Act

This Act does not apply to:

(a) the Nauru Phosphate Royalties Trust;

(b) any decision as to joint ownership of land made by the Nauru Lands Committee under the:

(i) Nauru Lands Committee Act 1956;

(ii) Regulations Governing Intestate Estates 1938 under the Administration Order No. 3 of 1938;

(c) a legal entity which is formed, incorporated, established or operating outside the Republic; or

(d) a corporation which is a wholly owned subsidiary of a legal entity, where the disclosure obligations on the legal entity include the beneficial ownership information in respect of the entity and the corporation subsidiaries.

5 Meaning of beneficial owner

(1) In this Act ‘beneficial owner’ or ‘beneficial ownership’ means:

• (a) person who ultimately owns or controls a legal entity;
  
• (b) person on whose behalf a transaction is being conducted in a legal entity;
  
• (c) persons who exercises residual control over a legal entity; or
  

(d) direct or indirect ownership by control of shares, voting rights or any other device under any instrument vesting any tangible or intangible right of ownership interest in that entity.

(2) Where two or more natural persons each own or control an interest in a legal entity to which this Act applies, each of them are deemed for the purposes of this Act as owning and controlling the whole interest irrespective of a proportionate shareholding.

(3) The Authority in determining beneficial ownership may trace through any number of persons or arrangements to any person who is the residual owner or has effective control of any ownership.

(4) The guidance issued under subsection (3) shall be published in the Gazette or notified by the Authority in a manner the Authority considers necessary to bring public awareness.

(5) The Cabinet may make regulation to amend, vary or add to the definition of a beneficial owners, beneficial ownership, legal ownership and registrable beneficial ownership.

6 Legal entities to which this Act applies

(1) Subject to section (4), this Act applies to:

• (a) a corporation incorporated under the Corporations Act;
  
• (b) a partnership under the Partnership Act;
  
• (c) a business registered in the name of 2 or more persons under the Business Names Act; and
  
• (d) an express or implied trust or unincorporated body operating in the Republic under an agreement or laws of the Republic.
  

(2) The Cabinet may make regulations for the purposes of this section.

PART 2 – NOMINATED OFFICER TO MAINTAIN BENEFICIAL
OWNERSHIP INFORMATION

Division 1 – Nominated Officer

7 Requirement to have a nominated officer

(1) A legal entity to which this Act applies shall:

• (a) have a nominated officer;
  

(b) the nominated officer under subparagraph (a) shall be a natural person who is a resident or a citizen in the Republic.

(2) Where a legal entity may have more than one nominated officer their functions and liabilities under this Act are joint and several.

(3) A legal entity which fails to comply with this section commits an offence and upon conviction is liable to a fine not exceeding $50,000 or a term of imprisonment not exceeding 3 years or to both.

8 Notice of appointment of nominated officer

(1) A legal entity shall appoint a nominated officer and notify the nomination in writing to the Authority within 30 days from the date of such appointment.

(2) A notice under subsection (1) shall specify the date of appointment.

(3) Where there is a change, the legal entity shall notify the Authority in not less than 30 days from the date of:

• (a) change of nominated officer; and
  
• (b) appointment of a nominated officer.
  

(4) A notice under subsection (3) shall specify the event and the date on which the change or appointment was made.

(5) A notice under subsection (1) or (3) shall be in the prescribed form.

(6) A legal entity which fails to comply with this section commits an offence and upon conviction is liable to a fine not exceeding $50,000 or to a term of imprisonment not exceeding 3 years or both.

(7) Where a legal entity fails to comply with subsection (1) or (3) the legal entity shall pay a penalty of late notification in the sum of $500 or any other payment which may be prescribed by the Cabinet by regulations.

(8) The institution of proceedings for an offence under subparagraph (7) shall not waive or exempt the payment of late fees by a legal entity.

9 Register of nominated officer

(1) A legal entity shall keep a register of nominated officers recording:

• (a) the officer’s name;
  
• (b) the residential address in the Republic;
  
• (c) written confirmation of the officer’s consent to the appointment.
  

(2) A legal entity which fails to comply with this section commits an offence and upon conviction is liable to a fine not exceeding $50,000 or to a term of imprisonment not exceeding 3 years or both.

Division 2 – Required Details

10 Duty of legal owners

(1) An owner or shareholder of a legal entity shall have a duty to trace the residual beneficial owner of and corresponding interest in the legal entity.

(2) Subsection (3) applies, if a legal owner of a legal entity receives a written notice from the legal entity’s nominated officer.

(3) The owner shall, within one month from receipt of the written notice stated under subsection (2) respond by giving notice to the legal entity’s nominated officer of the required details stated under section 12 in respect of each beneficial owner of the legal owner’s interest.

(4) Beneficial ownership is to be traced through any number of persons or arrangements of any description under section 5(3).

(5) If notice is given by a legal owner under subsection (3), the notice shall be accompanied by information which verifies the required details.

(6) A legal owner of an interest in a legal entity commits an offence if he or she without a reasonable cause shown:

• (a) fails to comply with this section; or
  
• (b) knowingly or recklessly makes a statement to the nominated officer which is false, deceptive or misleading in any material respect.
  

(7) A legal owner of an interest in a legal entity who contravenes subsection (6) commits an offence and upon conviction is liable to a fine not exceeding $50,000 or to a term of imprisonment not exceeding 3 years or to both.

11 Duty of beneficial owners and intermediate owners to assist

(1) This section applies to a person who has an interest in a legal entity, who:

• (a) is the beneficial owner but not the legal owner of that interest; or
  
• (b) is not the beneficial owner or the legal owner of that interest to be known as an intermediate owner and has the obligation on any beneficial owner or legal owner in the chain of ownership or indirect control.
  

(2) A beneficial or intermediate owner shall assist a legal owner to ascertain the beneficial owner of the legal owner’s interest in the legal entity and to notify the legal owner of any changes to the beneficial ownership of that interest.

(3) A beneficial or intermediate owner who contravenes subsection (2) commits an offence and upon conviction is liable to a fine not exceeding $50,000 or to a term of imprisonment not exceeding 3 years or both.

(4) A person does not contravene subsection (2) if the person shows that he or she took reasonable steps to ensure to comply with the provision.

12 Required details

The ‘required details’ are:

(a) in respect of a beneficial owner:

• (i) his or her name;
  
• (ii) his or her usual residential address;
  
• (iii) a service address, where if the service address is different from the residential address;
  
• (iv) his or her nationality;
  
• (v) his or her date of birth;
  
• (vi) the date on which he or she acquired an interest in the legal entity;
  
• (vii) the nature and extent as expressed in percentage of his or her interest in the legal entity; and
  

(b) in respect of a class of beneficial owners of such a size that the required details is not reasonably practicable to identify each beneficial owner, then the required details to be provided shall be in a manner that is sufficient enough to identify and describe the class of persons who are beneficial owners.

13 Changes to required details

(1) A legal owner, who is required to give notice to the nominated officer in accordance with section 8(3), shall also give notice to the legal entity’s nominated officer if the legal owner knows or has reasonable cause to believe that a relevant change has occurred.

(2) The legal owner shall give notice to the nominated officer within one month after the legal owner learns of the change or first has reasonable cause to believe that the change has occurred.

(3) A notice under subsection (1) shall:

• (a) contain details of the changes to the required details; and
  
• (b) be accompanied by information which verifies the changes to the required details.
  

(4) A legal owner who fails to comply with this section commits an offence and upon conviction is liable to a fine not exceeding $50,000 or to a term of imprisonment not exceeding 3 years or to both.

14 Preservation of required details and verifying information

(1) The nominated officer of a legal entity shall maintain and preserve in the Republic the following details:

• (a) required details; and
  
• (b) the information which verifies the required details.
  

(2) The required details under subsection (1) shall be preserved:

• (a) for 7 years from the end of the period to which the information relates; or
  
• (b) where an investigation is being carried out under this Act or any other law until the completion of the investigation.
  

(3) Subject to subsection (4), a legal entity’s nominated officer shall comply with the requirement of this section immediately before any of the following event occurs, if the legal entity:

• (a) is wound up, dissolved, struck off or removed from a register; or
  
• (b) otherwise ceases to carry on business.
  

(4) Where a person to whom subsection (3) applies, no longer intends to reside in the Republic, the person shall provide the required details to the Authority for preservation.

• (5) A person who fails to comply with a provision of this section commits an offence and upon conviction is liable to a fine not exceeding $50,000 or to a term of imprisonment not exceeding 3 years or to both.

15 Further consequences of failure to disclose beneficial ownership

(1) The nominated officer shall give notice to the legal entity if a nominated officer to which this Act applies believes a person who is a legal owner of an interest in that legal entity without any reasonable cause shown:

• (a) has failed to comply with section 10 or 11; or
  
• (b) has made a statement to the nominated officer which is false, deceptive or misleading in any material respect.
  

(2) On receipt of a notice under subsection (1), the legal entity shall serve a notice on the legal or beneficial owner of the legal owner’s interest to inform them that the:

• (a) legal entity has received a notice from the nominated officer under subsection (1);
  
• (b) legal entity may act in accordance with subsection (3); and
  
• (c) recipient has 14 days from the date of service of the notice to make representations to the legal entity.
  

(3) The legal entity shall consider any representations made by the legal owner and may take such actions as the legal entity thinks fit regarding the rights attaching to the legal owner’s interest in the legal entity under subsection (5).

(4) The legal entity shall give notice to the Authority specifying any action taken under subsection (5) within 14 days of the taking of such action.

(5) The actions a legal entity may take include:

• (a) the placing of such restrictions as the legal entity thinks fit on rights attaching to the legal owner’s interest in the legal entity, including:
  
  • (i) any right to transfer or assign shares or other interest;
    
  • (ii) any voting rights;
    
  • (iii) any right to further shares in addition to shares already held;
    
  • (iv) any right to payment due in respect of the legal owner’s interest, whether in respect of capital or otherwise;
    
  • (v) in the case of a partnership, any right to take part in the management of the partnership;
    
  • (vi) in the case of a Trust, any benefit to which the legal owner becomes entitled under the Trust in accordance with the Trust instrument or the Trust rules; or
    
• (b) the cancellation of the legal owner’s interest in the legal entity.

Division 3 – Disclosure Notices

16 Disclosure of beneficial ownership information by nominated officer

(1) The nominated officer shall provide the information required under (2) in respect of the beneficial ownership of the legal entity.

(2) The notice under subsection (1) shall be given in writing by the following authorities:

• (a) the Financial Intelligence Unit;
  
• (b) the Solicitor General;
  
• (c) the Nauru Revenue Office;
  
• (d) the Authority;
  
• (e) the Nauru Police Force;
  
• (f) the Chief Collector of Customs or any nominated officer of the Customs Office; or
  
• (g) the Director of Public Prosecutions.
  

(3) The notice shall state:

• (a) the information required;
  
• (b) that the information is required for a permitted purpose as defined in section 3(1); and
  
• (c) that the information to be provided as soon as practicable not exceeding:
  

(i) in the case of information relating to a registrable beneficial owner, 7 days from receipt of the notice;

(ii) in the case of information relating to a beneficial owner, other than a registrable beneficial owner, 30 days from receipt of the notice.

(4) The information under this section shall include information kept, maintained or preserved before the coming into effect of this Act.

(5) Information disclosed in accordance with subsection (4) may be used by the recipient as evidence in criminal, civil and regulatory proceedings.

(6) A nominated officer commits an offence if the officer:

• (a) fails to comply with subsection (1); or
  
• (b) knowingly or recklessly makes a statement, in response to receiving a notice under this section, which is false, deceptive or misleading in a material nature.
  

(7) A person who contravenes subsection (6) shall be liable upon conviction to a fine not exceeding $50,000 or to a term of imprisonment not exceeding 3 years or to both.

17 Restrictions on further disclosure of information provided by nominated officer

(1) This section applies in relation to information disclosed under section 16.

(2) Subject to subsection (3), the information shall not be further disclosed by the authorities under section 16(2) except for a permitted purpose.

(3) Information further disclosed in accordance with subsection (2) may be used by the recipient as evidence in criminal, civil and regulatory proceedings.

(4) This section does not apply to the disclosure of information by the Financial Intelligence Unit to an external intelligence or law enforce agency.

18 Disclosure of information obtained from a nominated officer by the Financial Intelligence Unit when responding to external requests

Any information obtained by the Financial Intelligence Unit from a nominated officer under section 16(1) may be disclosed by the Financial Intelligence Unit to an external intelligence or law enforcement agency:

(a) if the disclosure is made in response to a request made by the external intelligence or law enforcement agency;

(b) the request is made in furtherance of the Authority functions; and

(c) the request is made using such manner and form as the Financial Intelligence Unit may require.

19 Offence for tipping off resulting from issue of a notice by an authority

(1) A person commits an offence if:

• (a) the person knows or suspects that a notice has been issued, or is proposed to be issued, under section 16(2) in respect of a legal entity; and
  
• (b) the person discloses to any other person any information or other matter which may prejudice:
  
  • (i) a criminal, civil or regulatory investigation which is being or may be carried out, whether in the Republic or elsewhere, which relate to the issue of the notice; or
    
  • (ii) criminal, civil or regulatory proceedings which have been or may be initiated, whether in the Republic or elsewhere, which relate to the issue of the notice.
    

(2) Nothing in subsection (1) makes it an offence for a legal practitioner or pleader to disclose any information or other matter:

(a) to a client of the legal practitioner or pleader (or to a representative of the client) in connection with the giving of legal advice to the client; or

(b) to any person:

• (i) in contemplation of or connection with legal proceedings; and
  

(ii) for those proceedings.

(2) A person who contravenes subsection (1) shall be liable upon conviction to a fine not exceeding $50,000 or to a term of imprisonment not exceeding 3 years or to both.

(3) Subsection (2) does not apply in relation to any information or other matter which is disclosed with a view to furthering any criminal purpose.

(4) A person does not contravene this section if the person shows that he or she did not know or suspect that the disclosure was likely to be prejudicial under subsection (1)(b).

PART 3 – DATABASE OF BENEFICIAL OWNERSHIP

20 The Database

(1) The Authority shall establish and maintain a database of the beneficial ownership of registrable beneficial owners to be known as the Republic Database of Beneficial Ownership.

(2) The Database shall contain the information specified in section 21(3).

21 Compulsory submission of registrable beneficial ownership information to the Authority

(1) The nominated officer shall take all reasonable steps necessary to ascertain whether a legal entity has a registrable beneficial owner.

(2) The steps referred to under subsection (1) may include, but are not limited to, obtaining the information specified in subsection (3) by a notice given under section 16(2).

(3) The nominated officer shall submit the following information to the Authority:

• (a) where the legal entity has a registrable beneficial owner:
  
  • (i) the required details of the registrable beneficial owner; and
    
  • (ii) details of any relevant changes; and
    
• (b) where the legal entity has no registrable beneficial owners, a statement of confirmation of that fact.
  

(4) Unless regulations made by Cabinet otherwise provide, submission of information under this section shall be in accordance with section 12.

(5) In relation to a legal entity already in existence when the Act commences, the nominated officer shall submit the information to the Authority:

• (a) on the first occasion after the commencement of the Act by:
  

(i) the date on which the legal entity’s next annual return shall be filed, delivered or made following receipt by the nominated officer of the first notice given under section 10(3); or

(ii) 30 June 2018, whichever is the earlier, but in any event as soon as reasonably practicable after the information has been submitted to the nominated officer; and

(b) on every subsequent occasion, within one month of the relevant information being notified to the nominated officer under section 10.

(6) In relation to a legal entity coming into existence after the commencement of the Act, the nominated officer shall submit the information to the Authority within one month of that information being notified to the nominated officer under section 10.

(7) A nominated officer commits an offence if the officer:

• (a) fails to comply with subsection (1), (4) (5) or (6); or
  
• (b) knowingly or recklessly makes a statement to the Authority which is false, deceptive or misleading in any material respect.
  

(8) A person who contravenes subsection (7) shall be liable upon conviction to a fine not exceeding $50,000 or to a term of imprisonment not exceeding 3 years or to both.

If a person is convicted of an offence under subsection (7), the court may order that person to take such action as is necessary to rectify that failure.

(9) If a nominated officer fails to adhere to the time limits stipulated in subsection (5) or (6), the Authority may accept late submission of the information upon payment of a penalty by the legal entity in the sum of $500 or any other payment which may be prescribed by the Cabinet by regulations.

(10) The Authority may not require payment of a fee under subsection (9) if criminal proceedings have been commenced in respect of the contravention.

22 Voluntary submission of non-registrable beneficial ownership information

(1) The nominated officer may submit to the Authority any other beneficial ownership information, including the required details of a beneficial owner other than a registrable beneficial owner.

(2) Submission of information under subsection (1) shall be in accordance with section 23.

23 Beneficial ownership information to be submitted

(1) A nominated officer shall submit the information to the Authority unless subsection (2) applies.

(2) The nominated officer is exempt from complying with subsection

(1) where:

(a) regulations so provide; or

(b) upon receipt of an application from the nominated officer, the Authority is satisfied that the nominated officer:

(i) does not have access to the information; or

(iii) is otherwise unable, with reasonable excuse, to comply with this section, and shall be exempt from such compliance.

(3) Unless exempted under subsection (2), a nominated officer who fails to comply with subsection (1) commits an offence.

(4) A person who contravenes subsections (1) and (3) shall be liable upon conviction to a fine not exceeding $50,000 or to a term of imprisonment not exceeding 3 years or to both.

(5) An application under subsection (2)(b) shall be in the form and manner required by the Authority.

24 Access to the Database

(1) Access to the information on the Database is only permissible in accordance with this Part.

(2) Information obtained through access to the Database may only be further disclosed in accordance with this Part.

25 Mode of access

(1) The Authority may allow access to the Database by such means and in such manner as the Authority determines.

(2) The Cabinet in consultation with the Authority may by regulations make further provision about access to the Database under this Part but not about the persons who may access the Database.

26 Authority not liable for accuracy of information submitted

For the avoidance of doubt, the Authority is not liable for the accuracy of any beneficial ownership information submitted to the Authority for inclusion in the Database.

27 Persons who may access the Database

(1) Any of the persons under section 16(2) may access the Database for a permitted purpose.

(2) In addition to subsection (1), the following persons may access the Database:

• (a) employees of the ICT Department;
  
• (b) a legal entity, for the purpose of accessing the beneficial ownership information submitted in relation to that legal entity; and
  
• (c) a third party that is authorised by a legal entity, to access beneficial ownership information in relation to that legal entity to which the authorisation applies.
  

(3) The third party authorised under subsection (2)(c), may access the Database of a legal entity which includes access for:

• (a) viewing the beneficial ownership information in relation to that entity contained in the Database; and
  
• (b) submitting information in relation to that entity in accordance with section 21 or 23.

28 Disclosure of beneficial ownership information by nominated officer

(1) Subsection (2) applies if a nominated officer receives a notice described in subsection (3).

(2) The nominated officer shall disclose, in accordance with the notice, any information the officer holds in respect of the beneficial ownership of the legal entity in the notice.

(3) The notice under subsection (1) shall be a written notice given by:

• (a) the Financial Intelligence Unit;
  
• (b) the Solicitor General;
  
• (c) the Nauru Revenue Office;
  
• (d) the Authority;
  
• (e) the Nauru Police Force;
  
• (f) the Chief Collector of Customs or any nominated officer of the Customs Office; or
  
• (g) the Director of Public Prosecutions.
  

(4) The notice shall state:

• (a) what information is required;
  
• (b) that the information is required for a permitted purpose under section 3(1); and
  
• (c) that the information shall be provided as soon as possible and in any event:
  • (i) in the case of information relating to a registrable beneficial owner within 7 days;
    
  • (ii) in the case of information relating to a beneficial owner, other than a registrable beneficial owner, within one month, of the date of the notice.

(5) The information that shall be disclosed under this section includes information obtained before this Act came into operation.

29 Restrictions on further disclosure of information accessed from the Database

(1) Subject to subsection (2), information accessed by an authority under section 28 shall not be further disclosed except for a permitted purpose.

(2) Subject to subsection (1), information accessed under section 28 and disclosed under this section may be used by the recipient as evidence in criminal, civil or regulatory proceedings.

(3) Information accessed under section 28 shall not be disclosed other than with the consent of the nominated officer of the legal entity to which the information relates.

(4) A person who fails to comply with subsection (1) or (2) commits an offence.

(5) A person who contravenes subsection (4) shall be liable upon conviction to a fine not exceeding $50,000 or to a term of imprisonment not exceeding 3 years or to both.

30 Disclosure of information from the Database by the Financial Intelligence Unit when responding to external requests

Any information obtained by the Financial Intelligence Unit by accessing the Database may be disclosed by the Financial Intelligence Unit to an external intelligence or law enforcement agency:

(a) if the disclosure is made in response to a request made by the external intelligence or law enforcement agency;

(b) the request is made in furtherance of the Authority functions; and

(c) the request is made in such manner and form as the Financial Intelligence Unit may require.

31 Offence for tipping off resulting from access to the Database

(1) A person commits an offence if the person:

• (a) knows or suspects that information on the Database has been or is proposed to be accessed in accordance with this Part; and
  
• (b) discloses to any other person any information or other matter which may prejudice:
  

(i) a criminal, civil or regulatory investigation which is being or may be carried out, whether in the Republic or elsewhere, which is connected to the access to the information on the Database; or

(ii) criminal, civil or regulatory proceedings which have been or may be initiated, whether in the Republic or elsewhere, which are connected to the access to the information on the Database.

(2) Nothing in subsection (1) makes it an offence for a legal practitioner or pleader to disclose any information or other matter:

• (a) to a client of the legal practitioner or pleader or representative of the client in connection to the giving of legal advice to the client; or
  
• (b) to any person:
  

(i) in contemplation of or in connection to legal proceedings; and

(ii) to the purpose of those proceedings.

Subsection (2) does not apply in relation to any information or other matter which is disclosed with a view to furthering any criminal purpose.

(3) A person who contravenes subsection (1) shall be liable upon conviction to a fine not exceeding $50,000 or to a term of imprisonment not exceeding 3 years or to both.

(4) In proceedings for an offence under this section, a person does not contravene this section if he or she proves that he or she did not know or suspect that the disclosure was likely prejudicial in a way mentioned in subsection (1)(b).

PART 4 – GENERAL

Division 1 – General

32 Oversight functions of the Authority

(1) Without limiting the function of the Authority under any other Act or law, the Authority is responsible for assessing compliance with this Act by a relevant person.

(2) For the purpose of this section and Schedule 1, ‘relevant person’ means:

• (a) a legal entity;
  
• (b) a nominated officer;
  
• (c) a legal owner;
  
• (d) a beneficial owner;
  
• (e) an intermediate owner; and
  
• (f) a registrable beneficial owner.
  

(3) Schedule 1 confers additional powers on the Authority to give effect to subsection (1).

33 Striking off

Where there is reasonable cause to believe that a legal entity has failed or is failing to comply with its obligation under the Act, the legal entity may be struck off the relevant register or its registration may otherwise be cancelled.

34 Regulations and orders

(1) The Cabinet may make regulations and orders:

• (a) in accordance with this Act;
  
• (b) in respect of any other matter for which the Cabinet, in consultation with the Authority considers that regulations and orders are necessary or expedient to give effect to this Act; or
  
• (c) other matters for which the Authority may make regulations under this Act.
  

(2) Regulations made by the Cabinet under subsection (1) in accordance with other provisions of this Act may:

• (a) provide for their contravention to be an offence;
  
• (b) exempt a person from a provision of this Act to which the regulations relate;
  
• (c) permit a person to exercise a discretion in respect of any matters specified in the regulations;
  
• (d) require compliance with standards or the adoption of practices recommended or specified from time to time whether before or after the making of the regulations by a person or body specified in the regulations; and
  
• (e) contain consequential, incidental, supplementary and transitional provisions which the Treasury, the Cabinet considers to be necessary or expedient.
  

(3) The power conferred by subsection (2)(e) includes the power to modify, adapt or amend any provision of this Act or any other enactment.

(4) All Regulations and orders made under this Act shall not come into operation unless submitted and approved by the Cabinet and published in the Gazette.

35 Fees

(1) The Cabinet may by regulations prescribe fees for the purposes of this Act.

(2) A prescribed fee is a debt due to the Republic for which the legal entity may be sued accordingly.

(3) Fees paid and received under this section shall be paid into and form part of the Treasury Fund.

36 Appeals

(1) A relevant person who is aggrieved by a decision of the Authority may appeal to the Authority for the review of its decision on the grounds any of the following decisions was unreasonable having regard to all the circumstances of the case:

• (a) section 23, to submit beneficial ownership information to the Authority; and
  
• (b) the imposition by the Authority of a civil penalty under Schedule 1 paragraph 8.
  

(2) On the determination of an appeal under this section the Authority shall confirm, vary or revoke the decision in question.

(3) Any variation or revocation of a decision does not affect the previous operation of that decision or anything duly done or suffered under such decision.

(4) Without limiting subsection (3), a decision on an appeal under this section is binding on the applicant and the respondent.

(5) An appeal lies to the Court, in accordance with the rules of the court, on a question of law from any decision.

37 Offences by legal entities other than natural persons
(1) The officer of a legal entity commits an offence and is liable to the penalty provided for the offence if it is proven that such an officer authorised, permitted, participated in, or failed to take all reasonable steps to prevent, the commission of the offence.
(2) In this section, ‘officer’ includes:

(a) a director, secretary, partner, or other similar officer;

(b) a person purporting to act as a director, secretary, partner or other similar officer;

(c) if the affairs of the legal entity are managed by its members or council members, a member or council member.

(3) A person who contravenes subsection (1) shall be liable upon conviction to a fine not exceeding $50,000 or to a term of imprisonment not exceeding 3 years or to both.

38 Confidentiality

(1) A requirement imposed by or under this Act has effect despite any obligation as to confidentiality or other restriction on the disclosure of information imposed by statute, contract or otherwise.

(2) Accordingly, a disclosure made or the sharing of information in accordance with this Act does not breach:

• (a) any obligation of confidence in relation to the information so disclosed; or
  
• (b) any other restriction on the access to or disclosure of the information so accessed however imposed.
  

(3) This section is subject to section 39.

39 Privileged information

Nothing in this Act compels the production or divulgence by a legal practitioner or a pleader of an item subject to legal privilege but a legal practitioner or a pleader may be required to give the name and address of any client.

40 Other provisions concerning beneficial ownership not affected

The operation of this Act does not limit or otherwise restrict any other statutory provision concerning beneficial ownership.

41 Other disclosure provisions not affected

The operation of a power or duty in this Act to disclose information does not affect the operation of any other power or duty to disclose information which exists in this Act or any other Act or any restriction on such disclosure.

Division 2 – Compliance Provisions

42 Statement of compliance in annual returns

(1) A legal entity shall include a statement in their annual return which:

• (a) confirms that:
  

(i) the entity and the nominated officer in relation to the entity have each complied with their respective obligations under this Act;

(ii) the required details in respect of any registrable beneficial owner have been submitted to the Authority; and

(iii) all information submitted for entry on the Database is up to date and correct; and

(b) is countersigned by the nominated officer to evidence the officer’s agreement with the statement.

(2) The requirements of subsection (1) are additional to any other statutory obligations concerning annual returns.

43 Compulsory submission of annual returns for corporations

A corporation shall file, deliver or make as the case may require annual returns unless exempted from compliance in accordance with the provisions of the Corporations Act 1972.

SCHEDULE

OVERSIGHT BY THE AUTHORITY

1. Inspections and investigations
   
   • (1) The powers provided by this paragraph may be exercised at the absolute discretion of the Authority to ascertain whether the obligations and requirements imposed by this Act have been and are being complied with and whether the Database is effective and accurate.
     
   • (2) The Authority may inspect the books, accounts and documents of a relevant person in electronic format or otherwise for the purposes of ascertaining whether that person has complied and is complying with any obligations imposed under this Act.
     
   • (3) The Authority has every such power of entry and access as may be necessary for the purposes of paragraph (2), and the Authority may take possession of all such books, accounts and documents as, and for so long as, may be necessary for those purposes.
     
   • (4) The Authority may take copies of all books, accounts and documents in its possession for the purposes of an inspection and investigation under this paragraph.
     
   • (5) The Authority shall exercise the right of entry and access under paragraph (3) only during reasonable hours, and any person exercising that right shall, when doing so, produce written evidence of his or her appointment if required to do so.
     
   • (6) A relevant person is not under an obligation under this section to disclose any items subject to privilege information under section 39 of the Act.
     
2. Requests for information
   • (1) The powers provided by this paragraph may be exercised if the Authority considers necessary to assess compliance with the requirements of this Act.
     
   • (2) The Authority may request the relevant person to provide the Authority with any information that may reasonably require for the performance of the Authority’s functions under this Act and such information to be verified in such manner as the Authority directs in accordance with paragraph (4).
     
   • (3) But the Authority may only exercise the powers under this paragraph if, on reasonable grounds, that such powers is necessary for the performance of Authority’s functions under this Act.
     
   • (4) The Authority may issue directions to a relevant person to give effect to a request under paragraph (2) and the directions shall include a statement of reasons for their issue.
     
   • (5) If a relevant person contravenes any direction under paragraph (4), the Authority may apply to the Court for an order requiring the person to comply with such order.
     
   • (6) A statement by a relevant person in response to a direction issued under this paragraph may not be used in evidence against that person in respect of any criminal proceedings except proceedings alleging contravention of the following:
     
     • (a) sections 223 and 224 of the Crimes Act 2016; or
       
     • (b) section 15 of the Oaths, Affirmations and Statutory Declarations Act 1976.
       
   • (7) A relevant person has no obligation under this paragraph to disclose any information that is subject to legal privilege within the meaning pursuant to section 39 of the Act.
3. Power of the Authority to require information
   • (1) If, on an application made by the Authority, an authority is satisfied that there is good reason to investigate the affairs, or any aspect of the affairs, of a relevant person so far as is relevant for the performance of the Authority’s functions under this Act, the authority may by in writing authorise the Authority to exercise the powers under this paragraph and such powers are not otherwise exercisable.
     
   • (2) The Authority may by notice in writing, accompanied by a copy of the written authorisation under paragraph (1), require the following persons at a time and place specified or furnish information in relation to the investigation:
     
     • (a) the relevant person whose affairs are to be investigated; or
       
     • (b) any other person who, the Authority has reason to believe, has relevant information.
       
   • (3) The Authority may by notice in writing, accompanied by a copy of the written authorisation under paragraph (1), require any person to produce at a specified time and place any specified documents, copies of documents, or any documents or copies of documents of a specified class, which appear to the Authority to relate to any matter relevant to the investigation.
     
   • (4) If documents or copies of documents are not produced as required under paragraph (3), the Authority may require the person who was required to produce them to state, to the best of that person’s knowledge and belief, where they are.
     
   • (5) If any documents are produced as required under paragraph (3) the Authority may:
     
     • (a) take possession of them for so long as may be necessary;
       
     • (b) take copies or extracts from them; or
       
     • (c) require the person producing them to provide an explanation of any of them.
       
   • (6) A statement by a person in response to a requirement imposed under this paragraph may not be used in evidence against that person in respect of any criminal proceedings except proceedings for an offence under this Act.
     
   • (7) A person is not under an obligation under this paragraph to disclose any items subject to legal privilege as per section 39 of the Act.
     
   • (8) In this Schedule, “documents” includes information recorded in any form and in relation to information recorded otherwise than in legible form references to its production include references to producing a copy of the information in legible form.
     
   • (9) If a person claims a lien on a document, its production under this paragraph does not affect the lien.
     
4. Search warrants
   
   • (1) If, upon information on oath laid by the Authority, a judge of the Court is satisfied, in relation to any documents, that there are reasonable grounds for believing:
     
     • (a) that:
       

(i) a person has failed to comply with an obligation under paragraph 3 to produce them or copies of them; or

(ii) it is not practicable to serve a notice under paragraph 3(3) in relation to them; or

(iii) the service of such a notice in relation to them might seriously prejudice the investigation; and

(b) the documents are on premises specified in the information, the judge may issue a warrant.

(2) The warrant authorises any person named in the warrant:

• (a) to enter using such force as is reasonably necessary for the purpose and search the premises; and
  
• (b) to take possession of any documents or copies of documents appearing to be documents of the description specified in the information, or to take in relation to any documents so appearing any other steps which may appear to be necessary for preserving them and preventing interference with them.
  

(3) If, during a search of premises for documents of a description specified in the information, other documents are discovered which appear to contain evidence relating to the discharge of the Authority’s functions under this Act or to an offence under this Act, the person named in the warrant may:

• (a) take possession of those documents or copies of those documents; or
  
• (b) take any other steps in relation to those documents which may appear to be necessary for preserving them and preventing interference with them.
  

(4) A person executing a warrant issued under paragraph (1) shall be accompanied by a constable.

(5) A person is not under an obligation under this paragraph to disclose any items subject to legal privilege as per section 39 of the Act.

5 Authorised persons

(1) The Authority may authorise any person to exercise on the Authority behalf all or any of the powers conferred by or under this Schedule for the purposes of investigating the affairs, or any aspect of the affairs, of a person specified in the authority.

(2) No person is bound to comply with any requirement imposed by a person exercising powers by any authority granted under paragraph (1) unless the person exercising the powers has, if required to do so, produce evidence of their authority.

6 Report and action to be taken

(1) The Authority may make a report of its findings resulting from it exercising functions under this Schedule.

(2) The report may specify:

• (a) any failure by a relevant person to comply with the provisions of this Act;
  
• (b) any action the relevant person shall take to rectify the failure; and
  
• (c) the timescale for the taking of such action.
  

(3) A report made under this paragraph may be sent to:

• (a) the relevant person;
  
• (b) where the relevant person is not a legal entity to which this Act applies, the legal entity;
  
• (c) where the relevant person is a legal owner of an interest in the legal entity, the nominated officer of that entity;
  
• (d) the Authority; and
  
• (e) where the report identifies that an offence may have been committed, the Attorney General.
  

7 Offences

(1) Subject to paragraph (3), a person commits an offence with connection to oversight if the person:

• (a) knows or suspects that:
  
  • (i) an inspection is being or is likely to be carried out under paragraph 1 (inspections and investigations);
    
  • (ii) information is being or is likely to be requested under paragraph 2 or paragraph 3; or
    
  • (iii) documents are or are likely to be required under paragraph 4 (search warrants);
    
• (b) falsifies, alters, conceals, destroys or otherwise disposes of, or causes or permits the falsification, alteration, concealment, destruction or disposal of, information that the person knows or suspects is or would be relevant to such an inspection or investigation or is or would be requested;
  
• (c) furnishes or sends to the Authority for any purpose under this Act a document which that person knows to be false or misleading in a material nature;
  
• (d) recklessly furnishes or sends to the Authority for the purposes of this Act a document which is false or misleading in a material nature;
  
• (e) in furnishing information to the Authority for the purposes of this Act:
  

(i) makes a statement which the person knows to be false or misleading in a material nature; or

(ii) recklessly makes a statement which is false or misleading in a material nature; or

(f) without reasonable excuse, fails to furnish information which that person is required to furnish to the Authority under this Act.

(2) It is a defence for the person charged to prove that the person had no intention of concealing facts disclosed by the information from persons carrying out such an inspection or investigation or requesting such information.

(3) A person commits an offence if the person:

• (a) without reasonable excuse, fails to comply with a requirement imposed on the person under paragraph 3;
  
• (b) intentionally obstructs a person exercising powers conferred by paragraph 1(2), (3) or (4) or paragraph 4(2) or (3); or
  
• (c) without reasonable excuse, fails to take the action specified in a report made by the Authority under paragraph 6 within the timescale specified in that report.
  

8. Civil Penalties
   
   • (1) The Authority may require a payment of a civil penalty for such contravention, if the Authority is satisfied that a relevant person has:
     
     • (a) committed an offence under subsection 7(3);
       
     • (b) contravened a provision specified in subsection (2); or
       
     • (c) furnished the Authority with false, inaccurate or misleading information.
       
   • (2) The provisions referred to in subsection (1)(b) are:
     
     • (a) section 8(6);
       
     • (b) section 9(2);
       
     • (c) section 11(3);
       
     • (d) section 13(4) ; or
       
     • (e) section 19(1).
       
   • (3) The Authority shall give written notice to the person concerned of any decision under subsection (1), together with a statement of the reasons for the decision.
     
   • (4) The Authority may not in respect of any such contravention require a person to pay a civil penalty under this section if criminal proceedings have been commenced in respect of the contravention.
     
   • (5) If setting the amount of a civil penalty, the Authority shall have regard to any regulations under subsection (6).
     
   • (6) The Cabinet may make such regulations as are necessary to give effect to this section with respect to:
     
     • (a) the imposition of civil penalties under this paragraph; and
       
     • (b) the amount of those penalties.
       
   • (7) A person or body may appeal under section 36 against a decision of the Authority under subsection (1).
     
   • (8) Regulations made under subsection (6) may make provision for additional circumstances in which a civil penalty may be imposed in lieu of criminal proceedings under this Act.
     
   • (9) Any amount received as a penalty shall be paid into and form part of the Treasury Fund.