The European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 (“the Regulations”) were signed into law on 22 March 2019 and revoked the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016 (“the 2016 Regulations”).
These Regulations give effect to the Fourth EU Anti-Money Laundering Directive (“the 4th AMLD”) and the Fifth EU Anti-Money Laundering Directive (“the 5th AMLD”). Article 30 requires all EU Member States to implement procedures for both legal and corporate entities in respect of beneficial ownership.
Part 2 of the Regulations
Part 2 of the Regulations requires all companies (with very limited exceptions) to compile a Beneficial Ownership Register (“the Register”).
The information required to be held in the Register includes: –
- the beneficial owner’s name;
- the beneficial owner’s address;
- the beneficial owner’s PPS number;
- the beneficial owner’s nationality;
- the beneficial owner’s date of birth;
- a statement of the nature and extent of interest held by each such beneficial owner;
- the date on which the person was entered into the register as a beneficial owner and the date the person ceased to be a beneficial owner, if applicable;
- if no natural persons can be identified as beneficial owners having exhausted all possible means, the names and details of the natural persons who hold the position of senior managing official of the company shall be entered in the register; and
- details of the presenter if making the entry in the Register on behalf of the company.
These requirements are largely the same as the information required under the 2016 Regulations with the addition of the beneficial owner’s PPS number. While the PPS number must be recorded in the Register, it may not be otherwise disclosed.
Part 3 of the Regulations
Part 3 of the Regulations provide for the appointment of a Registrar of Beneficial Ownership of Companies and Industrial & Provident Societies (“the Registrar”). This function has been given to the Registrar of Companies. The Regulations establish the Central Register of Beneficial Ownership (“the Central Register”), which will come into effect on 22 June 2019. The information held in respect of each beneficial owner in the Register must now also be filed with the Central Register within 5 months from 22 June 2019 (i.e. by 22 November 2019). Where a company is incorporated after 22 June 2019, it will have 5 months from the date of incorporation to file the required information in the Central Register.
The 5th AMLD also provides that the Central Register will be connected with central registers established in other member states.
Updating the Register
There is an ongoing requirement for companies to ensure the information held on the Register is up to date and correct. The Registrar must also be notified of any changes with regard to the information held on the Register within 14 days.
Access to the Central Register
Unrestricted access to the Central Register will be granted to An Garda Síochána, FIU Ireland (Ireland’s Financial Intelligence Unit), the Revenue Commissioners, the CAB, the Central Bank, Minister of Justice and Equality, PSRA, Law Society of Ireland, General Council of the Bar or Ireland, designated accountancy body and ODCE inspectors.
Members of the public will only be able to access the name, month and year of birth, country of residence, nationality, and statement of the nature and extent of the interest held/control exercised by each beneficial owner. Therefore, the PPS number, date of birth and residential address of each beneficial owner will not be accessible to the public.
Definition of a Beneficial Owner
Article 3(6) of the 4th AMLD states that a beneficial owner means:
- any natural person 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 corporate entity;
- 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 of the corporate entity, 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 or persons or by multiple corporate entities which are under the control of the same natural person or persons shall be an indication of ownership of the corporate entity; and
- if, however no such natural person is identified, or if there is doubt that the person identified are the beneficial owner or owners the natural person or persons who hold the position of senior managing official shall keep records of the actions taken in order to identify the beneficial ownership.
Where a company does not hold the specified information required in relation to the beneficial owners, it must serve a notice under regulation 7 to any individual whom it reasonably believes to be its beneficial owner. The individual who is reasonably presumed to be a beneficial owner must reply within one month of service of the notice.
A company may also serve a notice under regulation 9 on a person (natural or otherwise) whom is likely to have that knowledge as to the identity of the beneficial ownership and if so, to supply information in relation to same.
Regulation 11 further requires a notice to be served on a beneficial owner as soon as reasonably practicable after it learns of a change to the details contained in the Register or has reasonable cause to believe a change has occurred. The beneficial owner has a duty to notify the company of which they are a beneficial owner of their status if they have not received a notice from the company requesting this information.
Sanctions for non-compliance
The sanctions for non-compliance have significantly increased from the 2016 Regulations. Failure by a company or a natural person (where applicable) to comply with its obligations, including failing to deliver the prescribed beneficial ownership information to the Registrar or failing to provide updated information for the purposes of the Central Register, is an offence and the company/person shall be liable, on summary conviction, to a fine not exceeding €5,000, or, on conviction on indictment, to a fine not exceeding €500,000. A person who fails to comply with a notice under regulation 7, regulation 9 and/or regulation 11 may also be liable to a 12-month imprisonment.