Central Register Of Beneficial Owners – Deadline Approaching – Corporate/Commercial Law



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Register of Beneficial Owners

We previously reported on the European Union (Anti-Money
Laundering: Beneficial Ownership of Corporate Entities)
Regulations, 2016 (S.I. No. 560 of 2016) (the “2016
Regulations
”). [1] With effect from 15 November
2016, the 2016 Regulations imposed an obligation on all entities
incorporated in Ireland to put in place and maintain a register of
its “beneficial owners”.  The 2016
Regulations have been repealed and replaced by the European Union
(Anti-Money Laundering: Beneficial Ownership of Corporate Entities)
Regulations, 2019 (the “2019
Regulations
”). 

What has stayed the same?

The 2019 Regulations retain the obligation on all
relevant entities” to identify and obtain and
update information in respect of, their “beneficial
owners
” and to enter same in a register of beneficial
owners.  The definitions of “relevant
entity
” and “beneficial owner” in
the 2019 Regulations are the same as the corresponding definitions
in the 2016 Regulations.  To recap:

  1. Every corporate or other legal entity
    incorporated in Ireland, including a company and any other body
    corporate so incorporated, is a relevant entity.  The 2019
    Regulations apply to all relevant entities except for companies and
    bodies corporate listed on a regulated market that are subject to
    disclosure requirements consistent with the law of the European
    Union or subject to equivalent international standards which ensure
    adequate transparency of ownership information.

  2. The 2019 Regulations incorporate by
    reference the definition of beneficial owner contained in point
    6(a) of Article 3 of the EU’s Fourth Anti Money Laundering
    Directive as follows:

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…;

 


 

(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

Some guidance as to what constitutes “control by other
means
” is provided in Recital 13 of the Fourth Anti
Money Laundering Directive as follows:

Control through other means may, inter alia, include
the criteria of control used for the purpose of preparing
consolidated financial statements, such as through a
shareholders’ agreement, the exercise of dominant influence or
the power to appoint senior management
”.

The “senior managing officials” which the
relevant entity is to record as its beneficial owners if, having
exhausted all possible means and if there are no grounds for
suspicion, no person has been identified under limb (i) of the
definition set out above or if there is doubt as to whether the
persons identified are beneficial owners include its directors and
its chief executive officer.

The obligations imposed on relevant entities as regards the
sourcing of information on the identity and particulars of their
beneficial owners and the duties imposed on those beneficial owners
themselves, by the 2016 Regulations have been replicated in the
2019 Regulations. Please refer back to our original note (hyperlink
below) for guidance on these aspects of the 2019 Regulations.

What has changed?

We have set out below some obligations newly imposed by the 2019
Regulations of which corporates should be aware.

  1. In addition to being obliged to
    obtain and hold details of the name, date of birth, nationality,
    and residential address of each beneficial owner and a statement of
    the nature and extent of the interest held by him or her or the
    nature and extent of control exercised by him or her, a relevant
    entity must obtain and hold the PPS number of each beneficial owner
    to whom such a number has been issued.   

  2. A relevant entity is obliged to
    provide “timely access” to its register of
    beneficial owners on request by any of the Garda
    Síochána, the Revenue Commissioners, the Criminal
    Asset Bureau, an inspector appointed under section 764(1) of the
    Companies Act, 2014 and a “competent
    authority
    ” (as defined in the Criminal Justice (Money
    Laundering and Terrorist Financing) Act 2010 (the
    2010 Act”)).

  3. Where a relevant entity enters into
    an “occasional transaction” or forms a
    business relationship with a “designated
    person
    ”, it will be required to provide the designated
    person with information about its beneficial ownership when the
    designated person is undertaking customer due diligence; to
    identify all of its beneficial owners to the designated person; and
    if there is a change to the relevant entity’s beneficial
    ownership register which is relevant to the occasional transaction
    or that occurs during the course of the business relationship
    within 14 days of the date on which the relevant entity becomes
    aware of the change.  An “occasional
    transaction
    ” is one to which a designated person is
    required to apply customer due diligence measures pursuant to the
    2010 Act.  A “designated person” has the
    meaning given to it in section 25 of the 2010 Act.  It
    includes financial institutions and, in respect of certain matters,
    legal professionals.

  4. The most publicised development
    introduced by the 2019 Regulations is the establishment of a
    central register to which relevant entities must file information
    in respect of their beneficial owners.  The register, which is
    to be administered by the Registrar of Beneficial Ownership of
    Companies and Industrial and Provident Societies (the
    Registrar”) is live at www.rbo.gov.ie.  Relevant
    entites incorporated before 22 June 2019 must make the obligatory
    filings on or before 22 November 2019. 
    Relevant entities incorporated after 22 June 2019, must make such
    filings within five months of incorporation.

  5. A relevant entity is obliged to
    deliver details of the name, date of birth, nationality and
    residential address of each beneficial owner of the entity to the
    Registrar, along with 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 name and number of the entity as
    they appear on the register kept under the Companies Act 2014 or,
    as the case may be, the register kept under the Industrial and
    Provident Societies Acts 1893 to 2014.  Relevant entities must
    update the information which they have provided to the Registrar
    when changes occur to same.  Filings may only be made online
    and they are free of charge. So that the Registrar can verify the
    information submitted to it, the relevant entity is also required
    to submit the PPS number of each beneficial owner.  The
    Registrar is prohibited from disclosing a PPS number and is obliged
    to store same in an encrypted form.

  6. Where a beneficial owner does not
    have a PPS number, the relevant entity will have to arrange for the
    beneficial owner concerned to execute a declaration of identity
    referred to as a BEN2 Form and then submit same to the
    Registrar.  Execution of a BEN2 Form in Ireland must be
    witnessed by a person authorised to take and receive statutory
    declarations. Execution of a BEN2 Form outside of Ireland must be
    witnessed by a notary public. Once the BEN2 Form has been completed
    it must be scanned and uploaded to the RBO portal in order to
     obtain an “RBO Number” which can then be used to
    complete the online beneficial ownership form. The RBO Number will
    act in place of the PPS number for beneficial owners with no PPS
    number for the purpose of the submission.

The Registrar will verify details of beneficial owners against
the records of the Department of Employment Affairs and Social
Protection (“DEASP”).  The
Registrar has identified the following as common reasons why
submissions by relevant entities are being rejected:

  • PPSN and/or Date of Birth is
    incorrect

  • Mismatch on name

  • Using maiden name instead of married
    name and vice versa

  • Using middle name in everyday usage,
    but not matching with forename as registered with DEASP (Paul Smith
    vs Michael Paul Smith)

  • Using shortened versions of a name
    (Des/Desmond, Eddie/Edward)

  • Using variations of a name
    (Bridget/Breege, Ted/Edward)

  • Using Irish version of a name, when
    English version is registered with DEASP (Eibhlínn/Eileen)
    or vice versa

  • Mix-up on entering details for
    multiple beneficial owners.
  1. A relevant entity which
    fails to submit the requisite information to the Registrar or which
    fails to update information so filed, will commit an
    offence and be liable on summary conviction to a class A
    fine (currently €5,000)
    and on conviction on
    indictment to a fine of up to €500,000
    .
       

  2. The 2019 Regulations
    provide for two levels of access to the information which a
    relevant entity has filed in the central register.  First, the
    following persons enjoy an unrestricted right of access to the
    central register:
  1. a member of the Garda
    Síochána, not below the rank of inspector, who is
    engaged in the prevention, detection or investigation of possible
    money laundering or terrorist financing;

  2. a member of the Financial
    Intelligence Unit (a State body which is to act as a central
    repository for reports of suspicious transactions concerning
    terrorist financing or money laundering);

  3. an officer of the Revenue
    Commissioners, holding a position not below that of Higher
    Executive Officer,

  4. an officer of the Criminal Assets
    Bureau, holding a rank not below the rank of inspector in the Garda
    Síochána, or holding a position not below that of
    Higher Executive Officer;

  5. subject to certain exceptions, a
    member of staff or an officer of a competent authority who is
    engaged in the prevention, detection or investigation of possible
    money laundering or terrorist financing; and

  6. an inspector appointed under
    Companies Act, 2014.

In the case of persons referred to in (a), (b) and (d) above,
exercise of the right of access is subject to the authorisation of
a member of the Garda Síochána, not below the rank of
superintendent.  In the case of persons referred to in (c)
above, exercise of the right of access is subject to the
authorisation of by an officer of the Revenue Commissioners,
holding a position not below that of Principal Officer.

Secondly, designated persons with whom a relevant entity enters
an occasional transaction or forms a business relationship or who
are undertaking customer due diligence pursuant to the 2010 Act in
relation to the relevant entity and members of the public may
access the name, the month and year of birth and the country of
residence and nationality of each beneficial owner and the
statement of the nature and extent of the interest held, or the
nature and extent of control exercised, by each beneficial
owner.

Next steps for companies

To the extent that they have not already done so, relevant
entities incorporated before 22 June 2019 should act without delay
to ensure that they make the requisite filings to the Registrar
before 22 November, 2019

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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