On 29th February, 2024, the Minister for Constitutional and Legal Affairs issued the Trustees’ Incorporation (Transparency of Beneficial Ownership) Rules, 2024. These Rules outline the obligations of ordinary or professional trustees in managing trusts. They include a variety of responsibilities, from acquiring specific information to maintaining confidentiality, and establish the liabilities of trust officers and managers.
Obligation to obtain and hold certain information
Trustees are required to hold and obtain adequate, accurate and current information on the identities of the settlor, trustee, beneficiaries or class of beneficiaries and any other natural person exercising ultimate effective control over the trust and basic personal or entity information on other regulated agents of, and service providers to the trust, including investment advisors or managers, accountants, and tax advisors for at least five (5) years after their involvement with the trust ceases. The trustee is required to submit to the Administrator General accurate and adequate particulars of the aforementioned persons using the prescribed forms.
Obligation to disclose information in the Trustees’ possession
Trustees are mandated to disclose their status to financial institutions and designated non-financial businesses and professions during the establishment of a business relationship or conducting occasional transactions, aiming to fulfill their obligations under the Anti-Money Laundering Act. Furthermore, upon request and within three working days, trustees are obligated to furnish to competent authorities and reporting persons with any pertinent information regarding the trust, its beneficial ownership, and the assets to be administered or held under the conditions of the business relationship.
Failure to comply shall amount to remedial action as may be directed by the Administrator General and suspension in the case of continued contravention.
Timely access to information on Trust by competent authorities
Further, trustees are required to provide access to information in a period of not later than three (3) business working days from the date of the request by competent authorities in relation to the beneficial ownership and control of the trust, the residence of the trustee, and any assets held or managed by the reporting person or any other person, in relation to any trustees with whom they have a business relationship, or for which they undertake an occasional transaction.
Non-disclose of beneficial owner’s information (the “Confidentiality”)
The Rules require a trustee to refrain from using or disclosing any information regarding any of the settlors, trustees, beneficiaries, or individuals exerting ultimate control over the trust, unless in adherence to communication with the beneficial owner directly, a court directive, instructions from the relevant beneficial owner, or in accordance with the provisions of the Act, other statutory regulations, and these Rules. Furthermore, the Rules prohibit the Administrator General, authorized officers, or competent authorities from communicating confidential information acquired in their capacities with unauthorized individuals or disclose it to the public, or make use of it, even after the termination of their employment
Liability of officer and manager of the trust
If any obligation arising under these Rules is breached, every office-bearer and person managing or assisting in the management of the trust shall be deemed to have committed the breach, unless they can prove to the satisfaction of the Administrator General that they exercised proper care and diligence. They must also demonstrate that they were unable to comply due to circumstances beyond their control in order to be exempt from liability.
Failure to comply with the Rules
Failure to adhere to these requirements will result to a fine of not less than Tanzania Shillings one hundred thousand (Tzs. 100,000) (approximately USD.40) but not exceeding Tanzania Shillings two hundred thousand (Tzs. 200,000) (approximately USD.80).