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Part B: Mineral Rights - Part B-6: Beneficiation - Processing, Trade & Transport - 35. Beneficiation – Processing, Trade and Transport - 35.3 Eligibility for Licence | 35.3(b) Eligibility for Licence as Authorised Trader/Dealer

Licensing in this area may already be contemplated by existing general business regulating laws and authorities in the jurisdiction. In that case, these provisions should guide and, if necessary, amend the existing business regulating laws.

Eligibility for licensing to engage in trade or deal in development minerals should be limited to individuals or entities who are registered to do business in the jurisdiction. If an entity, it should be organized under the law of the jurisdiction, and its authorised powers and business registration should include engaging in minerals trade. Any national ownership requirements should be specified. It is generally advisable to require that eligible companies only be involved in the minerals trade business and related activities, including processing and transport, in order to avoid abuse of any import or other fiscal privileges and to minimize tax avoidance by mining rights licence holders offsetting profits in one line of business with losses in another unrelated line.

35.3(b) Example:

Article [_]:

(1) Individuals of at least 18 years of age who are citizens of a member state of the African Union and whose principal residence is located in [the jurisdiction], duly registered and authorised to do business as mineral traders in [the jurisdiction] shall be eligible to be licenced as an Authorised Trader/Dealer.

(2) Entities shall be eligible to be licenced as an Authorised Trader/Dealer, provided that they meet the following requirements:

(a) they are organized under the laws of [the jurisdiction],

(b) they have the power under their charter document to engage in trading of development minerals,

(c) 100% of the ownership shares of the entity are ultimately held and controlled by citizens of member states of the African Union, of which no less than 51% are ultimately held and controlled by nationals (i.e., citizens of the licensing jurisdiction),

(d) they are registered and authorised to do business as mineral traders in [the jurisdiction], and

(e) they are only authorised to engage in trading of development minerals and associated activities as defined in the regulations.

(3) Persons or entities not eligible for licensing as an Authorised Trader/Dealer includes:

(a) Persons who are bankrupt or subject to bankruptcy, receivership or reorganization/liquidation proceedings;

(b) Persons whose licence under any of the activities provided for in this [Act][Code][Law] has been revoked within the past [_] years.

(c) Persons who have been found guilty of fraud, money laundering or corrupt activities.

(d) Persons engaged in activities other than processing, trade and transport of development minerals and associated activities.

(e) Any staff member of the [provincial/state] regulating entity under this [Act][Code][Law].

Annotation

The example is the same as the prior example for individuals, adjusted for the type of activity licenced.

For entities, this example proposes that the ownership be at least 51% national, with the balance held by citizens of other AU member states.

In other respects, the eligibility and ineligibility provisions in this example are the same as for the processing licence.