The 2016 Regulations came into force on 15 November 2016 and have now been revoked and replaced by the European Union (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 which were passed on 22 March 2019.
Key Features of the Beneficial Ownership Regulations
- Corporate or other legal entities incorporated in the State shall obtain and hold adequate, accurate and current information in respect of its beneficial owners and the nature and extent of the control exercised by them.
- A Central Register of beneficial ownership shall be established and corporate or other legal entities incorporated in the State are required to record its beneficial ownership information on the Central Register.
- Access to the information in the Central Register is provided for.
- Imprisonment and financial penalties for breaches are specified.
- A Personal Public Service Number (PPS number) for every beneficial owner is required where a number has been issued.
The following are the effective dates:-
- The Central Register will be available for filing by 22 June 2019
- Relevant entities which exist before 22 June 2019 will have 5 months to deliver the required information to the Central Register (by 22 November 2019)
- Companies incorporated on or after 22 June 2019 will have 5 months to deliver the required information to the Central Register
Definition of Beneficial Ownership
A beneficial owner, in the case of corporate entities, is 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 European 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 % 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 % 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.
In relation to “control via other means”, identification and verification of beneficial owners should, where relevant, extend to legal entities that own other legal entities, and obliged entities should look for the natural person(s) who ultimately exercises control through ownership or through other means of the legal entity. 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.
If, after having exhausted all possible means and provided there are no grounds for suspicion, no natural person 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) shall be entered in the Central Register as the beneficial owner(s).
The obliged entities shall keep records of the actions taken in order to identify beneficial ownership.
Every relevant entity shall take all reasonable steps to obtain and hold adequate, accurate and current information in respect of its beneficial owners being:-
- the name, date of birth, nationality, and residential address of each beneficial owner of it,
- 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 PPS number of each such beneficial owner to whom such a number has been issued.
Any changes that occur in the information under BOR shall be reflected in the Central Register within 14 days from the date of change.
Access to the Central Register
Access to inspect the Central Register is given to an authorised official of An Garda Síochána, FIU Ireland, the Revenue Commissioners, the Criminal Assets Bureau and other bodies engaged in the prevention or detection or investigation of possible money laundering or terrorist financing including the Central Bank, the Minister for Justice and Equality, the Property Services Regulatory Authority, the Law Society of Ireland, the General Council of the Bar of Ireland, a designated accountancy body and an inspector appointed under Section 764(1) of the Companies Act 2014.
A designated person and the general public will have restricted access to the following information on the Central Register:
- the name, the month and year of birth and the country of residence and nationality of each beneficial owner of it; and
- a statement of the nature and extent of the interest held, or the nature and extent of control exercised, by each such beneficial owner.
There will also be restricted to information on minors on the Central Register.
A relevant entity that fails to comply with Regulations 20, 21 or 23 commits an offence and shall be liable –
- on summary conviction, to a class A fine, or
- on conviction on indictment, to a fine not exceeding €500,000.
A presenter that fails to comply with Regulation 22 (information on the presenter) commits an offence and shall be liable, on summary conviction, to a class A fine.
A person who, in purported compliance with Regulations 20, 21, 22 or 23, makes a statement that is false in a material particular, knowing it to be so false or being reckless as to whether it is so false, commits an offence and shall be liable –
- on summary conviction, to a class A fine or imprisonment for a term not exceeding 12 months or both, or
- on conviction on indictment, to a fine not exceeding €500,000 or imprisonment for a term not exceeding 12 months or both.
A designated person who fails to comply with Regulation 20(3) (discrepancies on the Central Register) commits an offence and shall be liable, on summary conviction, to a class A fine.
There is no requirement for a foreign beneficial owner to have a PPS number solely for BOR but one nonetheless may be required for taxation reasons.
Companies should now implement the Regulations and prepare for filing the information in the Central Register from 22 June 2019.
If you need any help just call Aoife on 00353 21 4310266.