New Beneficial Ownership Regulations
The European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 (‘Regulations’) came into force on 22 March 2019.
To whom do the Regulations apply?
The Regulations apply to any company incorporated in the State (unless the company is subject to disclosure requirements in respect of regulated markets or is subject to any equivalent international standards).
The Key Points
The Regulations require that all companies must:
- maintain their own beneficial ownership register (‘Beneficial Ownership Register’), and
- file the details of the beneficial owners of the company in the Central Register of Beneficial Owners (‘Central Register’) which will be maintained by the Companies Registration Office.
Who is a beneficial owner?
The definition of beneficial owner is provided for in the Fourth Money Laundering Directive. This directive sets out a two limbed test for determining beneficial ownership:
- A beneficial owner is the natural person who ultimately owns or controls a legal entity through direct or indirect ownership of the shares, voting rights, ownership or control through another means. A shareholding or ownership interest of 25% or more of the shares in a company will be deemed to be beneficial ownership; and
- Where it is not possible to identify the beneficial owner under the first limb, the natural person(s) who hold the position of senior managing official(s) shall be registered as beneficial owner(s). A senior managing official includes a director and a chief executive officer.
Identifying Beneficial Owners
Companies must take “all reasonable steps” to identify its beneficial owners and enter the details in their Beneficial Ownership Register. Companies are required to document all efforts made to identify the beneficial owners and in certain circumstances will be required to serve notices on persons believed to be beneficial owners. The notices will set out particulars of the beneficial owner and ask the addressee to confirm whether or not they are the beneficial owner and if the particulars set out in the notice are correct.
Companies must note the date on which each natural person is entered in the Beneficial Ownership Register as being a beneficial owner and the date on which such person ceases to be a beneficial owner. There is a duty on companies to keep the information in both the Beneficial Ownership Register and the Central Register up to date and failure to do so could see the company being liable on summary conviction to a class A fine (i.e. a fine of up to €5,000) or on indictment to a fine not exceeding €500,000.
In the event of an omission by the company of the name of any beneficial owner from the Beneficial Ownership Register or where the details of the beneficial owner are incorrect, the beneficial owner may apply to the High Court for a rectification order and may even be entitled to compensation for any loss sustained by that person.
What details should be included on the Beneficial Ownership Register?
The company should obtain and keep up to date the following information:
- Name, date of birth, nationality and residential address of each beneficial owner
- A statement of the nature of the interest held or the nature of control exercised by a beneficial owner
- The PPS number (where applicable) of each beneficial owner.
Obligations on Beneficial Owners
A beneficial owner who receives a notice from a company should respond within one month of receiving the notice otherwise they may be found guilty of an offence and may be liable to a fine.
Alternatively, if that person knows or ought reasonably to know that he/she is a beneficial owner of a company but is not yet recorded on the company’s Beneficial Ownership Register, and has not yet received any notice to confirm his/her ownership, he/she is required to serve a notice on the Company setting out the extent of his/her ownership and confirming his/her personal details.
Who can access the information contained on the Central Register of Beneficial Owners?
Members of the public will have restricted access to the particulars of the beneficial owners (excluding PPS numbers) contained in the Central Register.
Certain other persons, as follows, shall have unrestricted access to the Central Register provided they are duly authorised:
- A member of an Garda Siochana
- A member of Financial Intelligence Unit
- An Officer of the Revenue Commissioners
- An Officer of the Criminal Assets Bureau
Each of the above listed persons may also disclose information in the Central Register to any corresponding authority in another Member State.
The above listed persons have a duty to report any discrepancies which they notice in the Central Register between the information contained therein and the beneficial ownership information duly available to them.
Other persons who may be granted access if they are so authorised and hold the necessary ranking include:
- A member of the Central Bank of Ireland
- An Officer of the Minister for Justice and Equality
- A member of the Property Services Regulatory Services
- A member of the Law Society of Ireland
- A member of the General Council
The Companies Registration Office will accept online filings from the 22 June 2019 onwards, and companies must file their beneficial owner details within 5 months of this date (22 November 2019) for the Central Register. Any company incorporated after the 22 November, will have 5 months to comply with the new obligations under this regulation.
This filing obligation may also be completed by a person who is not an officer or employee of the company but who has authority to act on its behalf.