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In July 2011 Belize faced its Third Round of Mutual Evaluation by the Caribbean Financial Action Task Force (CFATF). As a result of this, in November 2013, CFATF issued a public statement listing Belize as a jurisdiction with strategic deficiencies in its AML/ATF regime.
After a comprehensive revision of the legislative framework and its implementation by the public and private sector; Belize was removed from the list and therefore from the CFATF monitoring process in May 2015.
In order to bring itself up to date with the transparency requirements of the FATF Recommendations and to prepare for the Fourth Round of CFATF Evaluations which began in December 2022, and whose on-site visit was at the end of last year, Belize amended between 2022 and 2023, a number of laws such as the Money Laundering and Terrorism Prevention Act (Cap. 104) and the Accounting Records Act (Cap. 261:01). These laws added controls on transparency matters related to beneficial owners, nominee directors and keeping accounting records at the registered agent’s offices.
A new Companies Act (No. 11 of 2022) was also enacted, which provisions (for the most part) came into force on July 28th, 2022, and replaced the International Companies Act (Cap. 270) and the Companies Act (Cap. 250). This new law, among other things, required all companies established under the aforementioned laws to re-register through the Online Business Registration System (“OBRS”) within 12 months to obtain a new certificate and company number under the new Act.
On November 28th, 2023, the Cabinet of the Financial Services Commission of Belize, during a regular session, approved to proceed with the removal from the Register of those companies that did not comply with the “re-registration” process required by the new Companies Act.
On February 22nd, 2024, a list of 1,612 companies that were removed from the Belize Companies and Corporate Affairs Registry was published in the Gazette pursuant to Section 218 (1)(a)(ii) of the new Act which makes reference to the authority of the Registrar (Director General of the Financial Services Commission) to remove from the Registry those companies that fail to file such returns, notices or documents as may be required under the Companies Act.
Pursuant to Section 220 of the said Act, the effects for companies of being struck off the Register are:
- It may not commence legal proceedings, carry on any business or deal in any manner with the assets of the company;
- May not defend any legal proceedings, conduct any claim, or claim any right for or on behalf of the company; or
- May not act in any way with respect to the affairs of the company.
In those cases, in which the companies remain with the same status (eliminated) for a period of 5 consecutive years, they will be dissolved by the Registrar.
This is of utmost importance for all companies interested in remaining active, but with special attention to those asset holders that, due to ignorance of the new provisions or any other situation, have not made their “re-registration” process and therefore have been eliminated, making it difficult for them to have access to such assets and, at the same time, increasing penalties and restoration charges. For these cases the Law contemplates a restoration process subject to certain conditions, allowing the company to continue with the normal course of its business.
This process of removal from the Belize Register of Companies and Corporate Affairs is another control and transparency mechanism since in order to be “re-registered” companies had to comply with disclosure of some data in compliance with international standards.
The results of Belize’s Fourth Evaluation Round have not yet been published; however, the jurisdiction continues to undertake public-private sector efforts to further demonstrate strong technical compliance and effective implementation of the Recommendations.
For more information on these topics, please contact Eyra Perdomo, VP Compliance, Morgan & Morgan, [email protected].