The updated European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 may affect your business.
Failure to comply with these regulations may result in penalties between €5,000 – €500,000.
The previous filing obligation for companies and relevant entities
On 15 November 2016 Ireland implemented the European Union’s (EU) Fourth Anti-Money Laundering Directive by way of a statutory instrument.
Companies and other legal entities incorporated in Ireland were required to take all reasonable steps to hold adequate, accurate and current information on their “beneficial owners” within an internal Register of Beneficial Ownership (“RBO”).
New filing obligation
On 22 March 2019, new EU (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations came into force (“the Regulations”). This legislation revoked and restated the 2016 Directive with immediate effect.
The main feature to be aware of is the establishment of the Central Register of Beneficial Ownership (“CRBO”), where information that is maintained on the RBO is filed.
Filing of beneficial ownership details with the CRBO will be done only by entering the required information for each beneficial owner through an online portal.
It will not be possible to file beneficial ownership details on paper, by post, by email or on any CRO form. There is no fee for filing.
Who do these regulations apply to?
The Regulations apply to all Irish companies and other corporate bodies which include ICAVs & Industrial and Provident Societies.
Companies that are listed on a regulated market and that are subject to disclosure requirements consistent with the law of the EU are exempt from the Regulations. Companies that are subject to equivalent international standards that require disclosure of beneficial ownership information (the “Relevant Entity/ies”) are exempt as well.
Definition of Beneficial Owner
A “beneficial owner” is defined as the individual(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.
A shareholding of 25% plus one share or ownership interest of more than 25% in the entity held by an individual is an indication of direct ownership.
A shareholding of 25% plus one share or an ownership interest of more than 25% in the entity held by a corporate entity, which is under the control of an individual(s), or by multiple corporate entities, which are under the control of the same individual(s), is an indication of indirect ownership.
Where the Beneficial Owners are known
The Relevant Entity must send a notice addressed to the Beneficial Owner; this notice must be replied to within one month. The Beneficial Owner must state whether they are a Beneficial Owner of the Relevant Entity and correct any information which is to be kept on the RBO.
Where the Beneficial Owners are not known
Where no Beneficial Owners can be identified, the Relevant Entity must enter the names of the senior managers (including the directors and CEO) on the RBO as the “Beneficial Owners”.
Prior to taking this action the Relevant Entity must have exhausted “all possible means” and have no grounds for suspicion as to the identity of the relevant individual and records of the actions taken in order to identify its beneficial ownership must be kept.
Information to be maintained on Relevant Entities’ RBO
Every Relevant Entity in scope must take all reasonable steps to obtain and hold adequate, accurate and current information in respect of their Beneficial Owners. Information to be maintained on the RBO should include:
- Forename & Surname,
- Date of birth,
- Personal Public Service Number (PPSN). The Registrar has stated that the PPSN number will not be disclosed,
- Residential address,
- A statement of the nature of the interest held by each beneficial owner (e.g. controlling shareholder),
- A statement of the extent of the interest held by each beneficial owner (e.g. controller of 26% of shares in the company),
- The date on which each natural person was entered in the company’s own RBO as a beneficial owner,
- The date of cessation as beneficial owner,
- As mentioned above if having exhausted all possible means, no natural persons are identified as beneficial owners, there shall be entered in the register the names and details of the natural person(s) who hold the position(s) of senior managing official(s) of the company/I&P,
- Details of the presenter making the entry in the RBO on behalf of the company to include name, contact details and capacity in which they are filing.
Penalties for failure to comply with this regulation
Particular attention must be paid to the consequences of non-compliance as the fines on conviction are severe. This applies to all Relevant Entities regardless of size, activity or level of trading.
A relevant entity that fails to comply with the provisions of the Regulations commits an offense and shall be liable –
- On summary conviction, to a class A fine (not exceeding €5,000), or
- On conviction or indictment, to a fine not exceeding €500,000
Who may access the CRBO?
Restricted access will be given to the public and designated persons, however where the beneficial owner is aged under 18, access to their information in the CRBO will only be granted where public interest prevails.
Unrestricted access to the CRBO will be granted to specified members/personnel of the Garda Síochána, the Revenue Commissioners, CAB, ODCE or a competent authority engaged in AML prevention, detection or investigation.
As a director what do I need to do?
It is important to understand that if you are a company director, you must ensure that action is taken. This is a new filing separate to your ongoing annual compliance obligations (annual returns, tax, financial statements).
As with any compliance deadline, preparation is key. Make sure that the RBO is in place and that all relevant information has been collected. This will ensure that you are in a position to make a timely filing with the Registrar of Companies.
|Now||Establish the Internal Register of Beneficial Ownership|
|Now||Contact the Beneficial Owners to confirm ownership.|
|22 June 2019||The CRBO will begin to accept filings.|
|22 Nov 2019||Relevant entities must submit their Beneficial Ownership information to the CRBO by this date to ensure that they are not in breach of their statutory duty to file.|
|10 March 2021||The deadline for all CRBOs across EU Members States to be interconnected.|
|Ongoing||Newly incorporated companies must file within five months.|
|Ongoing||Registers must be maintained and reviewed regularly.|
|Ongoing||Changes to the Beneficial Owner that occur must be updated in the RBO, with a filing made to the CRBO within 14 days of the change.|
How can Baker Tilly help?
We can assist in advising on the impact of the Regulations for your Relevant Entity and the maintenance of the Beneficial Ownership Register. This includes:
- Establish and maintain the RBO.
- Assist in sending the necessary notice to the Beneficial Owners.
- Analyse the corporate shareholdings to determine the identity of the Beneficial Owner.
- Complete the filing at the CRBO.
- Notify the Register of any changes.
- Assist in notifying the Beneficial Owners of the obligations.
Our team is here to help you navigate and adapt to these changes so you can continue to thrive.
For further information, please contact Gráinne Howard or Jocelyn McCullagh of our Corporate Governance & Compliance department on +353 (1) 669 9999 or email firstname.lastname@example.org