Beneficial Ownership Regulations Passed
The European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 (the “2019 Regulations”) were passed on 22nd March 2019. The 2016 Regulations that came into force on 15 November 2016 have been revoked and replaced by the 2019 Regulations.
Key Features of the Regulations
- The Regulations require corporate or other legal entities incorporated in the State to obtain and hold adequate, accurate and current information in respect of its beneficial owners, and to state the nature and extent of the control exercised by them.
- The Regulations establish a central register of beneficial ownership and require corporate or other legal entities incorporated in the State to obtain to transmit its beneficial ownership information to the central register.
- The Regulations establish who shall have access the information held in the central register.
- The Regulations create offences for breaches.
If the requirement to obtain a PPS number for every beneficial owner is required this could prove problematic for foreign beneficial owners and how quick these will be issued by Revenue.
Firms who are considering assisting companies comply as a service to their clients should be aware of the responsibilities as presenters under the regulations including the offences. Also the information on the central register will not be pre-filled and will have to be manually entered into the system for each company.
Companies should now implement the Regulations and prepare for filing the information in the central register from 22nd June 2019.
The CRO have issued updated guidance on the Beneficial Ownership Regulations 2019 including a sample template for a Beneficial Ownership Register. Click here for more information.
The regulations were passed on 22nd March 2019 and the following are the effective dates:-
- The Central Register be available to entities and presenters for filing by 22nd June 2019
- Relevant entities which exist before 22 June 2019 will have 5 months to deliver the required information to the central register (by 22nd November 2019)
- Companies incorporated on or after 22nd June 2019 will have 5 months to deliver the required information to the central register
Article 3(6): ‘beneficial owner’ means any natural person(s) who ultimately owns or controls the customer and/or the natural person(s) on whose behalf a transaction or activity is being conducted and includes at least:
(a) in the case of corporate entities:
(i) the natural person(s) who ultimately owns or controls a legal entity through direct or indirect ownership of a sufficient percentage of the shares or voting rights or ownership interest in that entity, including through bearer shareholdings, or through control via other means, other than a company listed on a regulated market that is subject to disclosure requirements consistent with Union law or subject to equivalent international standards which ensure adequate transparency of ownership information.
A shareholding of 25 % plus one share or an ownership interest of more than 25 % in the customer held by a natural person shall be an indication of direct ownership. A shareholding of 25 % plus one share or an ownership interest of more than 25 % in the customer held by a corporate entity, which is under the control of a natural person(s), or by multiple corporate entities, which are under the control of the same natural person(s), shall be an indication of indirect ownership. This applies without prejudice to the right of Member States to decide that a lower percentage may be an indication of ownership or control. Control through other means may be determined, inter alia, in accordance with the criteria in Article 22(1) to (5) of Directive 2013/34/EU of the European Parliament and of the Council (3);
(ii) if, after having exhausted all possible means and provided there are no grounds for suspicion, no person under point (i) is identified, or if there is any doubt that the person(s) identified are the beneficial owner(s), the natural person(s) who hold the position of senior managing official(s), the obliged entities shall keep records of the actions taken in order to identify the beneficial ownership under point (i) and this point;
(Source: CRO Website, Click Here to view)
What does a relevant entity have to do?
Every relevant entity shall take all reasonable steps to obtain and hold adequate, accurate and current information in respect of its beneficial owners being:-
- the name, date of birth, nationality, and residential address of each beneficial owner of it,
- a statement of the nature and extent of the interest held, or the nature and extent of control exercised, by each such beneficial owner, and
- the PPS number of each such beneficial owner to whom such a number has been issued
If after having exhausted all possible means and provided there are no grounds for suspicion by the relevant entity, no natural person is identified, or there is any doubt that any natural person so identified is a beneficial owner of the relevant entity, the names of the one or more natural persons who hold the position of senior managing officials of the relevant entity shall be entered, in the relevant entity’s BOR as its beneficial owners.
The CRO have issued a sample template for a beneficial ownership register click here to download.
Duty to Keep the Register Up To Date
The 2019 Regulations provide for the beneficial owners and the relevant entities to keep the beneficial ownership register (“BOR”) up to date.
Access to the BOR
A relevant entity shall provide any member of the Garda Síochána, the Revenue Commissioners, a competent authority, the Criminal Assets Bureau or an inspector appointed under section 764(1) of the Companies Act 2014 with timely access, on request, to its beneficial ownership register.
File Beneficial Ownership Information in Central Register
A relevant entity is required to file the current information on its BOR in the Central Register. The PPS number will not be disclosed and only a hashed version will be available to the Registrar.
The contact details of the person or the presenter that delivers the information will also be required.
Requirement to Keep Information Up to Date
Any changes that occur in the information on the BOR, shall be reflected in the central register. These “follow up obligations” shall be discharged within 14 days from the change.
Access to the Central Register
Unrestricted access to inspect the central register is given to an Garda Síochána, a member of FIU, the Revenue Commissioners, the Criminal Assets Bureau. Other bodies whose member of staff is engaged in the prevention or detection or investigation of possible money laundering or terrorist financing shall have access such as the Central Bank of Ireland, an officer of the Minister for Justice and Equality, member of the Property Services Regulatory Authority, Law Society of Ireland, General Council of the Bar of Ireland or a designated accountancy body.
A designated person and the general public will have restricted access to the following information on the central register
(i) the name, the month and year of birth and the country of residence and nationality of each beneficial owner of it; and
(ii) a statement of the nature and extent of the interest held, or the nature and extent of control exercised, by each such beneficial owner
There will also be restricted to information on minors on the central register.
A relevant entity that fails to comply with Regulation 20, 21 or 23 commits an offence and shall be liable –
(a) on summary conviction, to a class A fine, or
(b) on conviction on indictment, to a fine not exceeding €500,000
A presenter that fails to comply with Regulation 22 (information on the presenter) commits an offence and shall be liable, on summary conviction, to a class A fine.
A person who, in purported compliance with Regulation 20, 21, 22 or 23, makes a statement that is false in a material particular, knowing it to be so false or being reckless as to whether it is so false, commits an offence and shall be liable –
(a) on summary conviction, to a class A fine or imprisonment for a term not exceeding 12 months or both, or
(b) on conviction on indictment, to a fine not exceeding €500,000 or imprisonment for a term not exceeding 12 months or both.
A designated person who fails to comply with Regulation 20(3) (discrepancies on the register) commits an offence and shall be liable, on summary conviction, to a class A fine.
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