New legislation has recently introduced requirements for Irish companies to publicly file details of their beneficial ownership.
The European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 (the "2019 Regulations") entered into force on 22 March 2019. The 2019 Regulations revoke and restate the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2016 (the “2016 Regulations”).
The 2016 Regulations already included an obligation for Irish companies to maintain a beneficial ownership register, but this has now been expanded to include the public filing obligation.
Who is a beneficial owner?
A beneficial owner is a natural person who ultimately owns or controls more than 25% of a legal entity through direct or indirect ownership of shares, or through control via other means.
Companies are obliged to take steps to identify their beneficial owners and beneficial owners have notification obligations in respect of applicable companies. Companies have an obligation to list “senior managing officials” in the register where beneficial owners cannot be identified. An exemption applies for corporates listed on a regulated market.
Part 3 of the 2019 Regulations imposes a new obligation on companies to file beneficial ownership information in the new Central Register of Beneficial Ownership of Companies and Industrial and Provident Societies (the “Central Register”). A registrar will be appointed to oversee the Central Register (the “Registrar”). It is anticipated that this role will be performed by the Registrar of Companies and the Companies Registration Office.
When does the new obligation come into force?
Part 3 takes effect on 22 June 2019 and existing companies will have five (5) months (i.e. by 22 November 2019) to deliver beneficial ownership information to the Registrar from this date. Companies that are incorporated on or after 22 June 2019 must make the required filings within five (5) months of incorporation.
The information required for the register is the beneficial owner’s name, date of birth, nationality, residential address, and statement of the nature and extent of the interest held. There is a new obligation to collect the PPS number of each beneficial owner (if issued with one).
The 2019 Regulations impose obligations on companies to keep beneficial ownership registers up-to-date and aligned with the information filed with the Registrar. Companies must also notify the Registrar of any relevant changes within fourteen (14) days.
Who has access?
Most of the information on the Central Register will be available to the public. This will be restricted to certain content (PPS numbers and residential addresses will not be provided to the public).
The following bodies have access to the beneficial ownership information on request:
- Garda Síochána;
- Revenue Commissioners;
- Criminal Assets Bureau;
- A competent authority; or
- An inspector appointed under the Companies Act 2014.
The register must also, in certain cases, be provided to "designated persons” when entering into an “occasional transaction”. An “occasional transaction” is one in respect of which a “designated person” is required to carry out customer due diligence under Irish AML legislation.
Failure to Comply with the Regulations
A company will commit an offence if there is a failure to comply with obligations under the 2019 Regulations, including failing to deliver the prescribed beneficial ownership information to the Registrar. The 2019 Regulations create offences for breaches of the rules by the Relevant Entities, including conviction on indictment and a fine of up to €500,000. The largest fine under the 2016 Regulations was €5,000.
To summarise, all entities that fall within the scope of the 2019 Regulations must:
- Create an internal beneficial ownership register;
- Be aware of the new requirement to collect the PPS numbers of all beneficial owners;
- Ensure that the beneficial ownership register is kept up to date.
- Allow the relevant authorities access to the internal register on request.
- Assess whether you need to provide beneficial ownership information to designated persons when entering business relationships.
- Be ready to file beneficial ownership information with the Central Register by 22 November 2019 at the latest.
How can we assist?
Leman Solicitors can assist in establishing your beneficial ownership register or updating your existing register to ensure that it complies with the 2019 Regulations, and with completing the applicable filing obligations. Please do contact us if you have any queries in this regard.
Draft regulations to tackle white collar crimes through the establishment of a new beneficial ownership register have been drawn up and will come into effect in the Republic on June 22nd.