Wednesday, 14 May 2014

BILL APPROVED – for NGOs to mandatorily submit financial statements to CAIPO

By Linda Straker

Grenada’s House of Representatives has approved legislation that will make it mandatory for non-governmental and charitable organisations to file their annual financial statement with the Registrar at the Corporate Affairs and Intellectual Property Office (CAIPO) within 15 days of holding an annual general meeting.

Failure to comply with the law can result in directors of the entity being charged a maximum of EC$500 000 or ordered to jail for six months. “Or to a further fine of EC$500 for every day or part thereof that the offence continues after a conviction is first obtained,” said the legislation, which was presented by Leader of Government Business, Gregory Bowen, during last Friday’s sitting of the House.

He explained that the legislation, which is an amendment to the Companies Act, seeks to amend the Companies Act Cap 58A to reflect more comprehensively the 40 recommendations and nine special recommendations of the Financial Action Task Force, which Grenada is committed to implement by virtue of its membership in the Caribbean Financial Action Task Force.

The Bill also provides for not-for-profit companies to notify the registrar within 15 days whenever there is a change to the composition of the directors.

Failure to inform the registrar is a liable penalty of EC$550 per day until corrective measures are undertaken by the affected entity.

The Attorney General will also now have the power to examine and inquire into the operations of the not-for-profit company into its nature, objects, administrations and management; into the value, condition, management and application of the property and income of the company where the company is suspected of having committed an offence under the Terrorism Act.

Bowen told the House that all these recommendations are necessary, as Grenada has to play its role to combat money laundering and other avenues that provides for the “washing” of illegally obtained money into a legal and viable channel.

“There is growing evidence in the world which points to the fact that non government and charitable organisations are used by terrorist organisations, drug dealers and others involved in money laundering to channel their money through these entities,” he said. “We in Grenada have to do what is necessary to combat the situation and to ensure that legislation are in place to stop not-for-profit companies from becoming victims of these criminal actions,” he said.

All civil society organisations are expected to be affected by this legislation when it comes into effect. They include: non-governmental organisations, such as political parties and other developmental organisations; and charitable organisations, such as churches, as well as social/humanitarians advocacy groups.

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