New Regulations Regarding Beneficial Interest of Companies

Details

Created: Thursday, June 20 2019 21:50

The European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 (the “2019 Regulations”) were signed on 22 March 2019.

They revoke the existing European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016 (the “2016 Regulations”), which required corporate entities to keep information relating to their beneficial ownership on an internal register. This requirement continues under the 2019 Regulations, along with significant new rules about beneficial ownership information being kept in a central register and made available to the public, State authorities and financial institutions.

The 2019 Regulations transpose into Irish law Article 30 of the Fourth EU Anti-Money Laundering Directive (AMLD4), as amended by the Fifth EU Anti-Money Laundering Directive (AMLD5).

Some key features of the 2019 Regulations are as follows:

Requirement to Maintain Register

The 2019 Regulations require corporate entities incorporated in Ireland (apart from listed companies subject to transparency rules), including ICAVs and Industrial and Provident Societies (a “relevant entity”) to obtain and hold information in respect of their beneficial owners, including the nature and extent of the control exercised by those beneficial owners.

This information must be kept on an internal beneficial ownership register.

There is now a requirement to obtain the PPS numbers of beneficial owners, where available.

These rules apply from 22 March 2019 and are very important for companies to be aware.

Provision of Information

The 2019 Regulations require relevant entities to provide beneficial ownership information on request to certain authorities (such as the Revenue Commissioners, the Gardaí, State competent authorities etc.). The information must also be provided to “designated persons” (i.e. persons or firms who are obliged to carry out anti-money laundering checks) when entering into a business relationship, or carrying out certain one-off transactions with those “designated persons”. This means that on opening a bank account, the beneficial ownership information must be provided to the financial institution.

Central Register

The 2019 Regulations establish a Central Register of Beneficial Ownership of Companies and Industrial and Provident Societies (the “Central Register”) and require relevant entities to transmit beneficial ownership information to the Central Register.

The Central Register will begin accepting filings from 22 June 2019 and existing relevant entities will have a further 5 months from this date (i.e. until 22 November 2019) to submit their beneficial ownership information to the Central Register.

Entities incorporated after 22 June 2019 will have 5 months from the date of incorporation to make the required filings.

Availability to the Public

The 2019 Regulations Identify the persons who can access the information held in the Central Register. The important point here is that most of the information on the Central Register will be accessible to the general public.

Offences

The 2019 Regulations create offences for breaches of the rules. There is the possibility of conviction on indictment and a €500,000 fine for certain breaches now, representing a significant increase from the maximum fine of €5,000 under the 2016 Regulations.

In general terms, companies need to be aware of these requirements and ensure that compliance is made within the relevant period.

The Government has created a website for the new body, which is the Central Register of Beneficial Ownership (“RBO”), and which is available at https://rbo.gov.ie/.